Dwight Schrute filed a petition under Chapter 7 of the Bankr…
Dwight Schrute filed a petition under Chapter 7 of the Bankruptcy Code. Three years ago, Dwight Schrute fraudulently conveyed a beet farm, Schrute Farms, to his mom. He made no attempt, however, to conceal the transfer, believing correctly that his creditors were too unsophisticated to attack the transfer. Under the relevant state fraudulent conveyance law, only those creditors who held claims against Dwight Schrute at the time of the transfer can avoid it as fraudulent. A five-year statute of limitations applies to such actions. Two years ago, Dwight Schrute’s fortunes improved briefly and he paid off all of his old creditors except Crazy Cat Lady Angela, who still holds a $3,000 unsecured claim against Dwight Schrute for infliction of mental distress on her cats. Since then, Dwight Schrute’s financial situation has deteriorated, and he now owes a total of $100,000 in unsecured debt (including Crazy Cat Lady’s claim). Assume that Schrute Farms is worth $50,000. If the Chapter 7 trustee attacks the transfer of Schrute Farms to mom, which of the following statements is the most accurate?