Opinions of the United 2003 Decisions States Court of Appeals for the Third Circuit

3-26-2003

In Re: USN Comm Inc Precedential or Non-Precedential: Non-Precedential

Docket 02-2865

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003

Recommended Citation "In Re: USN Comm Inc " (2003). 2003 Decisions. Paper 713. http://digitalcommons.law.villanova.edu/thirdcircuit_2003/713

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2003 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact [email protected]. NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 02-2865

IN RE:

USN COMMUNICATIONS, INC., Debtor

SCOTT PELTZ, as Liquidating Trustee of the USN Liquidating Trust, Successor to USN Communications, a Delaware Corporation, Appellant

v.

MARK HATTEN; TRIUMPH-CONNECTICUT LIMITED PARTNERSHIP, a Connecticut Limited Partnership; SOLOMON SCHECHTER DAY SCHOOL OF GREATER HARTFORD, INC., a non-for-profit educational institution; FSC CORPORATION, a Massachusetts corporation; HATTEN COMMUNICATIONS HOLDING COMPANY, a Connecticut corporation

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE D.C. Civil No. 00-cv-00996 District Judge: The Honorable Roderick R. McKelvie

Submitted Under Third Circuit LAR 34.1(a) March 4, 2003 Before: ROTH, BARRY, and FUENTES, Circuit Judges

(Opinion Filed: March 25, 2003)

OPINION ____________

BARRY, Circuit Judge

Appellant Scott Peltz, liquidating trustee for the USN Liquidating Trust, successor

to debtor USN Communications, Inc. (“USN”), brought this action seeking to avoid USN’s

transfer of approximately $68 million to appellees, owners of Connecticut Telephone and

Connecticut Mobilecom (collectively “CT Tel”), in exchange for all of their equity in CT

Tel and retirement of all of CT Tel’s outstanding debt. Appellant alleged that the $68

million transfer was constructively fraudulent under

(a)(1)(B) because

USN did not receive “reasonably equivalent value” in exchange for the transfer, and because

the acquisition rendered USN insolvent. After a bench trial, the District Court found that

appellant had not satisfied his burden of proving by a preponderance of the evidence that

$68 million was an unreasonable price for CT Tel at the time it was purchased or that the

acquisition rendered USN insolvent. The District Court had jurisdiction pursuant to

(b). We have appellate jurisdiction pursuant to

and will

affirm.

Because the parties in this case consented to a bench trial, we must affirm the

District Court’s factual findings unless they were clearly erroneous. Fed. R. Civ. P. 52. At

2 trial, the primary evidence introduced by appellant consisted of expert testimony and

analysis concerning the actual reasonable value of CT Tel and the insolvency of USN at the

time of the acquisition, which was countered in turn by expert testimony and analysis

presented by appellees. Our thorough review of the record yields no evidence which

suggests that the District Court’s factual findings that the $68 million price paid by USN to

acquire CT Tel was reasonable and that the acquisition did not render USN insolvent were

clearly erroneous. Accordingly, we will affirm the judgment of the District Court for

substantially for the reasons articulated in its thorough, accurate, and well-reasoned 82-

page memorandum opinion. It was well within the District Court’s prerogative as finder of

fact to choose not to rely on the speculative testimony of appellant’s experts as colored by

hindsight and the interests of litigation, especially when the $68 million price paid for CT

Tel was the product of arm’s-length negotiations between knowledgeable, sophisticated

parties, advised by reputable financial and legal professionals.

/s/ Maryanne Trump Barry Circuit Judge