Question

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Dan sells his expensive sports car worth $50.000 to his brother for $100. The next week, Dan files for bankruptcy under Chapter 7. Regarding the sale of the car, the trustee may 1) cancel it as a fraudulent transfer. 2) cancel it as a voidable prefetence. 3) not cancel it because it is a sale, not a gift. 4) not cancel it, but can sue Dan's brother for return of the $100.

Answer 1

Option 1 is correct The trustee may cancel it as fraudulent transfer. Because here actual intent to transfer the vehicle is to defraud the creditors.