FILED APR 30 2025 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP No. CC-24-1070-FSG GIANG THANH DONG and MARY TRAN NGUYEN, Bk. No. 8:23-bk-10014-SC Debtors. GIANG THANH DONG; MARY TRAN Adv. No. 8:23-ap-01035-SC NGUYEN; CA PROPMGT LLC, Appellants, v. MEMORANDUM ∗ THOMAS H. CASEY, Chapter 7 Trustee, Appellee.

Appeal from the United States Bankruptcy Court for the Central District of California Scott C. Clarkson, Bankruptcy Judge, Presiding

Before: FARIS, SPRAKER, and GAN, Bankruptcy Judges.

INTRODUCTION

In an action brought by the chapter 7 1 trustee of the estate of debtors

Giang Thanh Dong and Mary Tran Nguyen (“Debtors”), the bankruptcy

∗ This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1. 1 Unless specified otherwise, all chapter and section references are to the

Bankruptcy Code, 11 U.S.C. §§ 101–1532, “Rule” references are to the Federal Rules of Bankruptcy Procedure, and “Civil Rule” references are to the Federal Rules of Civil Procedure. 1 court entered summary judgment avoiding transfers made by Mary 2 under

§ 548(a)(1)(A) and (a)(1)(B). The court allowed the trustee to recover under

§ 550(a), not only the transferred property, but also the proceeds of a loan

secured by the transferred property and certain other property and assets

that were acquired with the loan proceeds.

Mary appeals, arguing that the court should not have granted

summary judgment on claims turning on her intent and that her brother

David (who, for a time, owned the property with Mary) should have been

joined as a necessary party.

We AFFIRM the portion of the judgment that provided for avoidance

of the transfer. But because § 550(a) permits recovery only of the

transferred property in kind or a money judgment for the value of the

property, we VACATE the portion of the judgment that allowed not only

for the recovery of the transferred property, but also assets generated by

the transferred property, i.e., the loan proceeds and real properties

purchased with those proceeds. We REMAND so the bankruptcy court can

consider whether there is any other legal basis for that recovery.

2For ease of reference and to prevent confusion, we refer to Mary Tran Nguyen as “Mary” and her brother David Nguyen as “David.” No disrespect is intended. 2 FACTS 3

A. Prepetition events. In late 2007, Mary’s parents, as trustees of the V & P Family Trust,

Dated April 8, 2006 (the “V & P Trust”), executed a grant deed transferring

real property located in Tustin, California (the “Tustin Property”) to Mary

and her brother, David, as trustees of the same V & P Trust.

Years later, Mary and her husband, Mr. Dong, became embroiled in a

dispute with Jonathan and Tracy Dickman, whose investment accounts

Mr. Dong managed. The Dickmans eventually sued Debtors in state court,

asserting causes of action for breach of contract and breach of fiduciary

duty and requesting damages in the amount of $2.5 million. About two

months after the Dickmans sued Debtors, the V & P Trust executed a

“corrective deed” transferring the Tustin Property to Mary and David as

tenants-in-common, granting each a fifty percent interest in the property.

In December 2021, CA PROPMGT LLC (“CPM”) was registered as a

limited liability company. According to CPM’s operating agreement,

Mr. Dong was the Chief Executive Manager and Mary and David were fifty

percent members of CPM.

After the creation of CPM, the parties executed a Declaration of Land

Trust Agreement (the “Trust Agreement”) creating the Williams Land

3 We have taken judicial notice of the bankruptcy court docket and various documents filed through the electronic docketing system. See O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.),

(9th Cir. 1989); Atwood v. Chase Manhattan Mortg. Co. (In re Atwood),

, 233 n.9 (9th Cir. BAP 2003). 3 Trust. The Trust Agreement identified Mary and David as grantors and

beneficiaries and CPM as trustee. Schedules A and B of the Trust

Agreement identified the Tustin Property as trust property. In accordance

with the Trust Agreement, Mary and David executed a Trust Transfer

Deed transferring the Tustin Property into the Williams Land Trust.

In March 2022, Mary and David, individually and for CPM, executed

a promissory note in favor of HomeBridge Financial Services, Inc.

(“HomeBridge”) for the principal amount of $850,000. Around the same

time, CPM, in its capacity as trustee of the Williams Land Trust, transferred

the Tustin Property back to CPM. Upon transfer back to CPM, CPM

executed a Deed of Trust against the Tustin Property in favor of the lender.

Soon thereafter, CPM used $427,613.25 of the loan proceeds to

acquire two parcels of real property in Oklahoma City, Oklahoma (the

“Oklahoma Properties”). The remainder of the loan proceeds were used to

pay expenses in connection with the purchase of the Oklahoma Properties

or transferred into a TD Ameritrade account held by CPM.

B. Debtors’ bankruptcy filing and the adversary proceeding. On January 5, 2023, Debtors filed a joint chapter 7 petition. In their

concurrently filed schedules, Debtors identified an interest in the Tustin

Property as well as a $847,910 lien against the Tustin Property in favor of

Shellpoint Mortgage Servicing. Debtors also identified the Dickmans’ $2.5

million state court litigation claim.

4 In amended schedules, Debtors disclosed a fifty percent interest in

CPM. Debtors also identified the Oklahoma Properties and the TD

Ameritrade account, noting that those assets were owned by CPM.

In May 2024, Thomas H. Casey, as chapter 7 trustee (the “Trustee”),

filed a complaint against Debtors and CPM. Among other things, he sought

to recover the Tustin Property from the Williams Land Trust and CPM as

fraudulent transfers made with the intent to hinder, delay, or defraud their

creditors under § 548(a)(1)(A), and that the transfers were constructively

fraudulent under § 548(a)(1)(B). The Trustee did not name David as a

defendant in this adversary proceeding. The Trustee sought a judgment

avoiding the multiple transfers of the Tustin Property from Mary to CPM

and the Williams Land Trust. The Trustee further sought to recover for the

benefit of the estate the Tustin Property, the Oklahoma Properties, and any

remaining loan proceeds.

The Trustee filed a motion for summary judgment on his claims (the

“MSJ”). Debtors opposed the MSJ on three grounds.

First, Debtors contended that David held a fifty percent ownership

interest in the Tustin Property, was a beneficiary of the Williams Land

Trust, and held a fifty percent membership interest in CPM. Thus, Debtors

asserted that the Trustee was required to join David as a necessary party to

this adversary proceeding pursuant to Civil Rule 19.

Second, Debtors argued that the Trustee did not provide evidence

that Mary acted with intent to hinder, delay, or defraud when she

5 facilitated the subject transfers. In support of this contention, Mary

submitted a declaration in which she asserted that she “never intended to

defraud anyone.” Mary further asserted that the original transfer from the

V & P Trust to Mary and David was made because she was unable to get a

loan without first changing title to the Tustin Property and because counsel

advised her that they had to execute the corrective deeds to pursue

financing.

Third, Debtors contested the “constructively fraudulent” transfer

claims, but they have abandoned those arguments on appeal.

Before the hearing on the MSJ, the court issued a tentative ruling in

which it requested clarification from the Trustee on a few issues, including:

(i) the Trustee’s authority to avoid transfers involving non-debtor third

parties, i.e., David; and (ii) Debtors’ asserted factual dispute regarding

Mary’s intent.

At the hearing on the MSJ, the Trustee clarified that he was not

seeking to avoid the transfers of David’s fifty percent interest in the Tustin

Property, instead only requesting a judgment avoiding the transfers of

Mary’s fifty percent tenancy-in-common interest.

In April 2024, the court issued its findings of fact and conclusions of

law related to the MSJ. The court found that the Trustee had met its burden

of proving Mary’s actual intent to hinder, delay, or defraud because the

badges of fraud were present. Specifically, the bankruptcy court found

that: (i) Mary made the subject transfers after the Dickmans sued;

6 (ii) Debtors’ schedules indicated minimal assets compared to the value of

the Tustin Property; (iii) Debtors admitted that the Dickman litigation

forced them into bankruptcy; and (iv) Mary is a beneficiary and trustee of

the Williams Land Trust. The court held that Mary’s conclusory statement

that she lacked intent to defraud was “inapposite, based on the presence of

badges of fraud,” and, as a result, Debtors did not raise a genuine issue of

material fact with respect to Mary’s intent.

In addition, the court held that the subject transfers were

constructively fraudulent. Thus, the court concluded that the transfers

could be avoided under § 548(a)(1)(B) as well as § 548(a)(1)(A). The court

also concluded that David was not a necessary party because the Trustee

was not seeking to avoid the transfers of David’s interests in any assets.

The court entered a judgment in accordance with its findings of fact

and conclusions of law. The initial judgment allowed the Trustee to recover

Mary’s fifty percent interest in: (i) the Tustin Property; (ii) the loan

proceeds; and (iii) the Oklahoma Properties. Subsequently, the court

entered an amended judgment that again allowed for the Trustee to

recover Mary’s fifty percent interest in the Tustin Property, and also

allowed the Trustee to recover all of the loan proceeds generated by

financing the Tustin Property and both Oklahoma Properties in full (the

“Amended Judgment”).

Debtor timely appealed. After the Panel held oral arguments, the

bankruptcy court issued an “Indicative Ruling and Order Proposing to

7 Vacate the Order Granting Motion for Summary Judgment” (the

“Indicative Ruling”). In the Indicative Ruling, the court noted that the

portions of the Amended Judgment allowing the Trustee to recover 100%

of the Oklahoma Properties and the remaining loan proceeds were entered

in error. The court stated that it intended to amend the judgment only to

add a parcel number identifying the subject property, and that the original

judgment contained the accurate remedy determination by the court, i.e.,

allowing recovery of only fifty percent of the Tustin Property, the

Oklahoma Properties, and the loan proceeds, representing Mary’s fifty

percent interest in those assets. The court indicated that if the Panel

remanded, the court would vacate the Amended Judgment.

JURISDICTION

The bankruptcy court had jurisdiction under

and

157(b)(2)(A) and (H). We have jurisdiction over the bankruptcy court’s

determination under

.

ISSUES

1. Did the bankruptcy court err in holding on a motion for summary

judgment that Mary made the subject transfers with “actual intent

to hinder, delay, or defraud” under § 548(a)(1)(A)?

2. Was David a necessary party to the adversary proceeding under

Civil Rule 19(a)(1)?

3. Did the bankruptcy court err in its determination regarding

recovery under § 550(a)?

8 STANDARD OF REVIEW

We review the bankruptcy court’s decision to grant or deny a motion

for summary judgment de novo. Botosan v. Paul McNally Realty,

(9th Cir. 2000). We apply the same standards used by the

bankruptcy court under Civil Rule 56, as made applicable by Rule 7056.

Meade v. Cedarapids, Inc.,

(9th Cir. 1999). Facts

determined for summary judgment proceedings are not entitled to the

clearly erroneous standard of appellate review. Audre, Inc. v. Casey (In re

Audre, Inc.),

(9th Cir. BAP 1997), overruled on other grounds as

recognized by Lopez v. Emergency Serv. Restoration, Inc. (In re Lopez),

, 104 n.2 (9th Cir. BAP 2007); Gertsch v. Johnson & Johnson, Fin. Co. (In re

Gertsch),

(9th Cir. BAP 1999).

DISCUSSION

Sections 548(a)(1)(A) and (B) allow a bankruptcy trustee to avoid

fraudulent transfers of a debtor’s property. Section 548(a)(1)(A) requires a

finding that the debtor transferred property “with actual intent to hinder,

delay, or defraud,” while § 548(a)(1)(B) allows for avoidance of transfers

without such a finding if certain conditions were present at the time of

transfer.

Section 550(a), in turn, governs recovery after a transfer is avoided.

The statute allows for recovery of either “the property transferred, or, if the

court so orders, the value of such property . . . .”

9 On appeal, Debtors dispute the court’s conclusion that Mary acted

“with actual intent to hinder, delay, or defraud” for purposes of

§ 548(a)(1)(A). But Debtors do not address the court’s alternative

conclusion that the subject transfers could be avoided as constructively

fraudulent transfers. Thus, as we discuss in section B, any error regarding

the finding of intent would be harmless; in any event, Mary’s declaration

was insufficient to create a genuine issue of material fact regarding Mary’s

intent. As we discuss in section C, Debtors’ arguments under Civil Rule 19

are also not persuasive.

Nevertheless, as we discuss in section D, the court’s judgment

allowed the trustee to recover, not only the “property transferred” (the

Tustin Property), but also other properties and assets acquired using the

transferred property, i.e., the proceeds of the loan secured by the Tustin

Property and the Oklahoma Properties that were bought with the loan

proceeds. Section 550(a) does not authorize recovery of the additional

properties and assets.

A. Summary judgment standard. Civil Rule 56(a), made applicable by Rule 7056, provides that

summary judgment is appropriate when “there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of

law.” A dispute over material facts is genuine where a reasonable jury

10 could return a verdict for the nonmoving party based on the evidence

presented. Anderson v. Liberty Lobby, Inc.,

(1986).

Once the movant has come forward with uncontroverted facts

entitling it to relief, the burden shifts to the nonmovant to establish that

there is a specific and genuine issue of material fact to warrant a trial. See

Celotex Corp. v. Catrett,

, 332 n.3 (1986) (Brennan, J., dissenting).

The nonmovant “may not rely on denials in the pleadings but must

produce specific evidence, through affidavits or admissible discovery

materials, to show that the dispute exists.” Barboza v. New Form, Inc. (In re

Barboza),

(9th Cir. 2008) (citation omitted). Conjecture,

surmise or “metaphysical doubt” by the nonmovant of the movant’s

assertions will not defeat a summary judgment motion. See Matsushita Elec.

Indus. Co. v. Zenith Radio Corp.,

(1986); In re Gertsch,

(even in cases where intent is at issue, summary judgment may

be appropriate if the nonmovant “rests merely upon conclusory

allegations, improbable inferences, and unsupported speculation”) (citation

omitted)).

In deciding whether material factual issues exist, the court must

resolve all ambiguities and draw all reasonable inferences against the

moving party. Matsushita Elec. Indus. Co.,

. But the court must

do so only if a nonmoving party submits specific evidence that contradicts

a fact specifically averred by the moving party. Lujan v. Nat'l Wildlife Fed'n,

(1990). If a motion for summary judgment is properly

11 supported and the nonmovant does not set forth specific facts showing a

genuine issue for trial, the court must grant summary judgment. Civil Rule

56(a); Rule 7056.

B. The bankruptcy court did not err in granting summary judgment on the avoidance issues. Debtors first dispute the bankruptcy court’s conclusion that Mary

effectuated the subject transfers with fraudulent intent. They argue that,

because Mary submitted a declaration denying that she harbored

fraudulent intent, the court should not have granted summary judgment

on that issue.

Even if the bankruptcy court erred in holding that there was no

genuine issue of material fact regarding Mary’s intent, the error would be

harmless. Debtors did not appeal the court’s holding that the subject

transfers were constructively fraudulent under § 548(a)(1)(B). Section

548(a)(1)(B) does not require a finding of intent. Reversal of the court’s

judgment of actual fraud under § 548(a)(1)(A) would not disturb the court’s

findings and conclusions regarding constructive fraud, and the Trustee

would still be able to avoid all the same transfers and recover all the same

assets.

In any event, the bankruptcy court did not err in concluding that

there was no genuine issue of material fact regarding Mary’s intent.

Although Debtors are correct that “[q]uestions involving a person’s state of

mind . . . are generally factual issues inappropriate for resolution by

12 summary judgment,” this is not a per se rule. Lovering Tubbs Tr. v. Hoffman

(In re O’Gorman),

, 1058 (9th Cir. 2024) (emphasis added)

(quoting Braxton-Secret v. A.H. Robins Co.,

(9th Cir. 1985)).

“[W]here the palpable facts are substantially undisputed, such issues can

become questions of law which may be properly decided by summary

judgment.”

As explained by the Ninth Circuit, where the plaintiff provides

evidence of fraud, and the defendant fails to carry its “burden of raising a

genuine dispute that there was ‘significantly clear’ evidence of a ‘legitimate

supervening purpose’ for the transfer,” summary judgment is appropriate.

at 1058-59 (quoting Acequia, Inc. v. Clinton (In re Acequia, Inc.),

, 806 (9th Cir. 1996)). Because “[i]t is often impracticable, on direct

evidence, to demonstrate an actual intent to hinder, delay or defraud

creditors,” bankruptcy courts “frequently infer fraudulent intent from the

circumstances surrounding the transfer, taking particular note of certain

recognized indicia or badges of fraud.” Id. at 1058 (quoting In re Acequia,

Inc., 34 F.3d at 805-06).

This Panel has affirmed several orders granting motions for summary

judgment on claims that involve a finding of fraudulent intent. See, e.g.,

Kresock v. U.S. Tr. (In re Kresock), BAP No. AZ-20-1270-BSL,

, at *10 (9th Cir. BAP Dec. 22, 2021) (“conclusory statements of fact

and self-serving declarations are insufficient to create genuine issues of

material fact”) (citing United States v. Wilson,

(9th Cir.

13 1989)); Stasz v. Gonzalez (In re Stasz), BAP No. CC-06-1380-BPaMa,

, at *5 (9th Cir. BAP Aug. 9, 2007) (no genuine issue of material fact

regarding intent where nonmoving party provided only a “bare assertion

to the contrary in her declaration”); Sarp v. Mork (In re Sarp), BAP No. WW-

06-1089-SPaMo,

, at *5 (9th Cir. BAP Apr. 18, 2007) (“self-

serving, unsubstantiated statements” by the nonmoving party regarding

his intent were insufficient “[w]hen stacked against the very substantial

evidence presented by the trustee”); see also Joudeh v. Truppa (In re Truppa),

BAP No. CC-16-1281-KuFL,

, at *9 (9th Cir. BAP Apr. 27,

2017) (aggregating additional cases where the Panel has affirmed a

bankruptcy court’s finding of fraudulent intent on a motion for summary

judgment).

Here, as in the cases referenced above, the only evidence offered by

Mary was a self-serving statement that she did not intend to defraud

anyone. Mary did not substantiate this conclusory statement with other

evidence, rebut the Trustee’s evidence regarding the badges of fraud, or

provide an alternative narrative regarding the purpose behind the subject

transfers. Under the authorities above, this was insufficient to raise a

genuine issue of material fact regarding Mary’s intent.

Further, the only explanation that Mary offered regarding her intent

related to the transfer of the Tustin Property from the V & P Trust to Mary

and David. Mary explained that an attorney advised the family to transfer

title so they could obtain a loan. However, the original transfer from the V

14 & P Trust to Mary is not a subject of this adversary proceeding; the Trustee

could not avoid that transfer because it was a transfer to Debtors. As a

result, Mary’s intent in connection with this transfer is irrelevant. Mary’s

declaration did not contradict the overwhelming circumstantial evidence

that she and David transferred the Tustin Property to CPM and the

Williams Trust in order to protect that property from the creditors of Mary

and her husband, Mr. Dong.

Debtors assert that the bankruptcy court was obligated to hear

Mary’s testimony at trial before making any findings regarding Mary’s

intent. They are incorrect. The court has no such obligation unless a

nonmoving party raises a genuine issue of material fact. Further, Debtors

have not articulated any testimony they would offer at trial that would

defeat the Trustee’s evidence regarding intent. At best, Debtors’

declarations and arguments amount to “metaphysical doubt,” which “will

not defeat a summary judgment motion.” Matsushita Elec. Indus. Co.,

. 4

The court did not err in holding that Debtors did not raise a genuine

issue of material fact regarding Mary’s intent.

4 Debtors also argue that courts cannot make credibility determinations at the summary judgment stage. That may be true as a general proposition, but the bankruptcy court did not make any findings of credibility. Instead, the court was entitled to disregard Mary’s testimony because she only attempted to explain a different transfer and did not explain the questioned transfers at issue. 15 C. David was not a necessary party for purposes of Civil Rule 19(a). Pursuant to Civil Rule 19(a)(1), “[a] person who is subject to service

of process and whose joinder will not deprive the court of subject-matter

jurisdiction must be joined as a party” where the following is true:

(A) in that person’s absence, the court cannot accord complete relief among existing parties; or

(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may:

(i) as a practical matter impair or impede the person’s ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.

“There is no precise formula for determining whether a particular

nonparty should be joined under Rule 19(a)[.] The determination is heavily

influenced by the facts and circumstances of each case.” EEOC v. Peabody

W. Coal Co.,

(9th Cir. 2010) (quoting N. Alaska Env’t Ctr.

v. Hodel,

(9th Cir. 1986)).

Although Debtors cite to all three subsections of Civil Rule 19(a)(1) as

bases for requiring the joinder of David as a party to this adversary

proceeding, Debtors’ argument that David would somehow be prejudiced

by this litigation pertains only to Civil Rule 19(a)(1)(B)(i). Debtors do not

contend that the bankruptcy court was unable to accord complete relief

16 among the Trustee and Debtors. See Official Comm. Of Unsecured Creditors v.

JP Morgan Chase Bank, N.A. (In re M. Fabrikant & Sons, Inc.),

(Bankr. S.D.N.Y. 2008) (holding that the inquiry under Civil Rule

19(a)(1)(A) is limited to whether the court can grant complete relief to

existing parties and the “effect a decision may have on the absent party is

not material”). Nor do Debtors assert that excluding David places Debtors

at risk of incurring inconsistent obligations.

With respect to joinder under Civil Rule 19(a)(1)(B)(i), courts “focus[]

on the prejudice to the absent party if the litigation proceeds in its

absence.”

“The absentee must ‘claim a legally protected interest relating

to the subject matter of the action,’ and the impact of any adjudication must

be ‘direct and immediate.’”

(quoting Northrop Corp. v. McDonnell

Douglas Corp.,

(9th Cir. 1983); Janney Montgomery Scott,

Inc. v. Shepard Niles, Inc.,

(3d Cir. 1993)).

Debtors have not articulated an impact on David that is “direct and

immediate” and “legally protected.” Debtors’ sole argument is that David

holds a fifty percent interest in the Tustin Property, that he did not want to

be a co-owner with the Trustee, and that he feared that the Trustee would

seek to sell both his interest and Mary’s interest in the Tustin Property

pursuant to § 363(h). Debtors’ argument fails because David has no “legally

protected” right in not becoming a co-owner with the Trustee. When Mary

and Mr. Dong filed their bankruptcy petition, all of their interests in

17 property became property of their bankruptcy estate by operation of law. 5

This means that Mary’s interest in CPM and the Williams Land Trust, and

her indirect interest in the Tustin Property and the Oklahoma Properties,

came under the control of the Trustee, whether David likes it or not.

During the hearing on the MSJ, counsel for Debtors clarified that

David’s main concern was the potential for sale of the Tustin Property. But

the Trustee could not sell both Mary’s and David’s interests in the Tustin

Property without commencing and prevailing in a separate adversary

proceeding under § 363(h) and Rule 7001. David would be free to assert

any rights David may have in the Tustin Property in that adversary

proceeding.

Because Debtors have not articulated any “legally protected” impact

on David, either before the bankruptcy court or before this Panel, the

exclusion of David from this adversary proceeding did not run afoul of

Civil Rule 19(a)(1).

D. The legal basis of the court’s recovery decision is unclear. Section 550(a) provides that, if the trustee successfully avoids a

fraudulent transfer, the trustee may recover “the property transferred, or, if

the court so orders, the value of such property.” In other words, the trustee

can recover either the transferred property itself or a money judgment for

its value. But in this case, the bankruptcy court allowed the Trustee to

5Although there are some statutory exclusions from the property of the estate, Debtors do not contend that any exclusion applies to any of those property interests. 18 recover “the property transferred” (Mary’s interest in the Tustin Property)

and additional assets (the loan proceeds generated by the Tustin Property

and the Oklahoma Properties purchased with those proceeds).

The court did not provide a legal basis for its allowance of recovery

beyond the Tustin Property or its value. In both the original and the

Amended Judgment, the court references only § 550(a). However, the plain

language of § 550(a) expressly limits recovery to the transferred asset or a

money judgment for its value. Section 550(a) does not provide for the

recovery of what one might call proceeds of the transferred asset, such as

money borrowed against the transferred property after the transfer, or

other properties acquired with those loan proceeds.

There may be other legal grounds on which a trustee could recover

the proceeds of a fraudulently transferred property, but neither the Trustee

nor the bankruptcy court articulated them. The bankruptcy court may

address any such alternative theories on remand. For purposes of this

appeal, it is sufficient to say that § 550(a), standing alone, does not permit

recovery of anything other than the transferred property or a money

judgment for its value.

Even if there is a legal theory on which the Trustee could recover the

proceeds of the Tustin Property, we see no basis on which the Trustee

could recover all of those proceeds. This is because the Trustee can only

avoid the transfer of Mary’s fifty percent interest in the Tustin Property.

Allowing recovery of fifty percent of the transferred property but 100% of

19 its proceeds is both illogical and unjust to David, who owned the other fifty

percent of the Tustin Property.

As we have noted, the bankruptcy court has issued an Indicative

Ruling stating that, if it had jurisdiction to do so, it would vacate the

Amended Judgment. We are unwilling to remand the matter to the

bankruptcy court without providing further guidance, because simply

vacating the Amended Judgment could simultaneously go too far and not

far enough.

The Indicative Ruling may go too far because it provides that the

court will vacate the Amended Judgment in its entirety. But the court’s

determination on the avoidance issues was not error, so there is no reason

to vacate that aspect of the decision.

The Indicative Ruling does not go far enough because it would not

explicitly address both issues concerning the court’s recovery decision. The

Indicative Ruling demonstrates the court’s understanding that the Trustee

cannot recover the entirety of the Oklahoma Properties and the loan

proceeds because he was only entitled to avoid the transfer of Mary’s fifty

percent interest in the Tustin Property. But the Indicative Ruling does not

address the point that § 550(a) does not authorize the recovery of any

“proceeds” of a fraudulently transferred asset.

Consequently, we remand this matter for the bankruptcy court to

reconsider what the Trustee is entitled to recover and decide whether there

is a legal basis on which the Trustee can recover anything other than

20 Mary’s interest in the Tustin Property itself or a money judgment for the

value of that interest. 6

CONCLUSION

The bankruptcy court did not err in concluding that Debtors did not

raise a genuine issue of material fact regarding Mary’s intent and that

David was not a necessary party to the adversary proceeding. We therefore

AFFIRM the court’s judgment with respect to those conclusions. However,

the bankruptcy court’s determination regarding recovery of assets

exceeded the scope of § 550(a), and it is unclear if the bankruptcy court

relied on alternative theories allowing for the recovery of assets beyond

what is allowed under § 550(a). We therefore VACATE the portion of the

court’s judgment related to recovery under § 550(a) and REMAND this

matter for further proceedings conforming to this Memorandum.

6 On March 7, 2025, the Trustee filed a motion before this Panel for leave to correct the Amended Judgment entered by the bankruptcy court. Because we are vacating that judgment in part, we DENY the Trustee’s motion as moot. 21