IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA In re EUGENE MYRON KRAVIS,                                       No. 1-87-01396      Debtor. ______________________/ CHARLES DUCK, Trustee,      Plaintiff,    v.                                                                              A.P. No. 1-87-0214 ROBERTA ZOBEL KRAVIS,      Defendant. _______________________/ Memorandum of Decision      On March 9, 1987, debtor Eugene Kravis transferred a note and its securing deed of trust to his wife, defendant Roberta Kravis. At that time, the debtor was being pursued by his creditors; the transfer rendered him insolvent. The note was then worth $48,600.00, and has since been paid in full.      The debtor admits that his intent in making the transfer was to place the note out of the reach of his creditors. He contends, however, that this was part of legitimate prebankruptcy planning.      On May 5, 1987, the debtor and Roberta signed a brief document entitled "Agreement to Transfer Property." This document recited that in return for the March 9 assignment Roberta would transfer her interest in the home in which they both resided to the debtor. At the time, Roberta had equity of $31,000.00 in the property. The same day, she executed a quitclaim deed transferring the home from her separate property to both her and her husband as joint tenants.      Roberta claims that in addition to the written terms of the Agreement to Transfer Property she orally agreed to make certain repairs and improvements to the property.      On August 10, 1987, the debtor filed his Chapter 7 petition. The Trustee here seeks to avoid the transfer of the note as fraudulent pursuant to section 548 of the Bankruptcy Code.      While transfers between spouses in contemplation of bankruptcy are not per se fraudulent, they are to be given very close scrutiny by the courts. 4B Collier on Bankruptcy (14th Ed.), sec. 70.72; Matter of Loeber (Bkrtcy.D.N.J.1981) 12 B.R. 669, 675. Where any indication of fraudulent intent is present, the transferee who is related to the debtor has at least the burden of proof as to the bona fide nature of the transfer. Seitz v. Mitchell (1887) 94 U.S. 580, 583; In re Elliot (DC E.D.Pa.1948) 83 F.Supp.771, 773, aff'd sub nom. Elliot v. McCann (3rd Cir.1949) 173 F.2d 895; Menick v. Goldy (1955) 131 Cal.App.2d 542, 547; Matter of Loeber, supra.      In this case, the transferred note was the debtor's only valuable asset. It was transferred because the debtor was being actively pursued by his creditors. While styled as legitimate prebankruptcy planning, it took place five months before the bankruptcy was filed. The transfer took place two months before the agreement purporting to document it. The transfer of the purported consideration was at variance with the terms of the purported agreement, and part of the consideration is alleged to be based on oral terms not even mentioned in the written agreement. Under these circumstances, the Court has no trouble disregarding the story put forth by the debtor and his wife and finding the transfer wholly fraudulent.      For the above reasons, the transfer will be avoided and the Trustee shall have judgment against Roberta in the sum of $48,600.00 plus interest at the legal rate from and after March 9, 1987, together with costs of suit.      Pursuant to Bankruptcy Rule 9021, a separate judgment will be entered. This memorandum constitutes findings and conclusions pursuant to FRCP 52(a) and Bankruptcy Rule 7052.
Dated: March 14, 1988                                                                              ________________________                                                                                                                      Alan Jaroslovsky                                                                                                                      U.S. Bankruptcy