Reasonably Equivalent Value for Academic Prestige?!

BearingPoint's Trustee has just brought a fraudulent transfer action to get back a donation it paid Yale of $6 million to endow a chair and earn naming rights of certain on-campus buildings at its School of Management.

(If someone can find a link, please post.)

This academic of course thinks summary dismissal is warranted for the suggestion that they might not have received REV for the honor of having their name used in connection with a prestigious professorship!

Comments

[Guan Yang]

Reuters: http://www.reuters.com/article/idUSN1520618120100315

I've uploaded the complaint here: http://www.scribd.com/doc/28469420

[Joe S.]

Of course it is not avoidable. It is a tithe to a Temple of Mammon.

[FJP912]

Wouldn't naming rights be equivalent to a form of advertising? It's more or less a billboard with benefits, the benefits being the association with Yale. There have been other naming rights situations often involving sports arenas (e.g. Enron Field). Were any of those naming rights payments found avoidable?

[Christopher]

From the Wall Street Journal's story about this, Tuesday.

"He [the trustee] is also seeking the return of $2.1 million BearingPoint paid to Yale three months before its Chapter 11 filing in a deal that allowed the firm's employees to attend leadership classes and education programs at the school."

This raises the "ordinary course of business" defense to a preference/avoidance claim. Yale is in the business of selling education. For it to accept the $2.1 million in a deal allowing the firm's employees to attend classes, etc., is arguably not a preference payment, but simply the conduct of the ordinary course of Yale's business.