Full Opinion

BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 1 of 30FILED U.S. Bankruptcy Appellate Panel of the Tenth Circuit NOT FOR PUBLICATION 1 October 23, 2026 UNITED STATES BANKRUPTCY APPELLATE PANEL Anne M. Zoltani OF THE TENTH CIRCUIT Clerk _________________________________ IN RE MICHAEL GIBSON, BAP No. CO-25-023 Debtor. __________________________________ Bankr. No. 22-14730 ELLA CONEY, Adv. No. 24-01018 Chapter 7 Defendant - Appellant, v. OPINION HARVEY SENDER, Chapter 7 Trustee, Plaintiff - Appellee. _________________________________ Appeal from the United States Bankruptcy Court for the District of Colorado _________________________________ Before SOMERS, PARKER, 2 and HERREN, Bankruptcy Judges. _________________________________ 1 This unpublished opinion may be cited for its persuasive value but is not precedential, except under the doctrines of law of the case, claim preclusion, and issue preclusion. 10th Cir. BAP L.R. 8026-6. 2 Although Judge Parker was necessarily absent from the courtroom during oral argument, she will continue to participate on the panel with the aid of the oral argument recording and has received all the benefit of counsel’s advocacy. See Whitehall Tenants Corp. v. Whitehall Realty Co., 136 F.3d 230, 233 (2d Cir. 1998); United States v. Cato, 9 F.3d 1546 (5th Cir. 1993). BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 2 of 30 SOMERS, Bankruptcy Judge. _________________________________ I. Background 3 Michael Gibson (“Debtor”) sued John Callahan and others in the District Court for Arapahoe County, Colorado (“State Court”) asserting various claims, including intentional infliction of emotional distress, which were ultimately dismissed. On March 15, 2018, the State Court awarded Callahan $5,116.50 plus interest for attorney’s fees and costs in connection with the State Court litigation. Debtor appealed to the Colorado Court of Appeals, which affirmed. On January 4, 2022, the State Court awarded Callahan $17,224.87 (“Second Award”) for fees and costs related to the appeal. Debtor owns real property in Colorado (“Property”). Ella Coney, Debtor’s mother (“Appellant”), periodically loaned Debtor money primarily through cashier’s checks or cash. On January 27, 2022, approximately three weeks after the Second Award, Debtor signed a promissory note in favor of Appellant for $45,000 secured by the Property (“Promissory Note”) with a deed of trust that was recorded that same day (collectively, “Home Loan Transaction”). The Promissory Note provides that Debtor “promises to pay” Appellant $45,000 “with interest accruing on the unpaid balance at a rate of five percent (5%) per annum.” 4 To arrive at the $45,000 amount, Debtor explained that he and Appellant totaled the value of cashier’s check receipts, signed handwritten receipts, and 3 The Bankruptcy Court’s Memorandum Opinion After Trial [Bankr. ECF No. 99] contains a comprehensive review of the factual and procedural background of this matter. 4 Promissory Note, Ex. 9 to Complaint [Bankr. ECF No. 1-9]. 2 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 3 of 30 cash exchanges. 5 In her deposition, Appellant addressed the need for security given that Debtor owed her “a lot of money.” 6 Debtor gave Appellant $5,000 in November of 2022 (“November 2022 Transfer”). On December 2, 2022, Debtor filed a chapter 7 petition along with statements and schedules valuing the Property at $615,000. Harvey Sender (“Appellee”) was appointed as chapter 7 trustee. Less than a week postpetition, on December 7, 2022, Debtor gave Appellant another $5,000 (“December 2022 Transfer”). On March 21, 2023, the 341 Meeting of Creditors (“341 Meeting”) was held. On January 25, 2024, Appellee commenced the underlying adversary proceeding 7 to (i) avoid transfers from Debtor to Appellant (the Home Loan Transaction, the November 2022 Transfer, and the December 2022 Transfer) under 11 U.S.C. § 549(a), 8 § 547(b), § 548(a)(1), § 544, and Colorado law; (ii) recover all transferred property or the value of such property under § 550(a); (iii) preserve any avoided transfer or avoided lien for the benefit of the estate under § 551; and (iv) disallow Appellant’s claims against the bankruptcy estate under § 502(d). 5 Tr. at 19 in Appellant’s App. at 324 (“[Appellant] has cashier’s checks receipts and . . . signed hand[written] receipts. We added all of that up and it was $45,000. And that’s not really including, I know she gave me, you know, $500 here, $500. [Appellant] gave me cash, too. So I couldn’t argue that I owed her at least this much money.”). 6 Dep. at 99 in Appellant’s App. at 134 (“[Debtor] was given the money in increments, and he told me that he would pay it back, and he was trying to pay it back. And at some point, when he needed more money, then . . . we were adding up the amounts that he had been given. . . . [A]nd that’s a lot of money, and I need security for this.”). 7 Case No. 24-01018-TBM. 8 Unless otherwise noted, all references to “Section,” “§,” “Bankruptcy Code,” and “Code” refer to the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq. 3 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 4 of 30 During the adversary proceeding, the Bankruptcy Court denied Appellant’s motion for summary judgment and two motions to dismiss. The Bankruptcy Court held trial on May 12–13, 2025 (“Trial”), which Appellant’s counsel attended but Appellant did not. Following post-trial briefing, the Bankruptcy Court entered its Memorandum Opinion After Trial (“Opinion”) and accompanying Judgment (“Judgment”) on August 25, 2025. Appellant appealed the Opinion and Judgment on September 5, 2025. In its Opinion, the Bankruptcy Court concluded the following regarding the Home Loan Transaction: • The transfer was actually fraudulent under § 548(a)(1)(A) and Colorado law and constructively fraudulent under § 548(a)(1)(B) and Colorado law, and Appellant did not establish the good faith defense under § 548(c). 9 • The transfer was preferential under § 547(b) and neither the contemporaneous exchange of new value nor the ordinary course defenses of § 547(c) were established. 10 As to the November 2022 Transfer, the Bankruptcy Court concluded the following: • The transfer was not preferential under § 547(b). 11 • The transfer was actually fraudulent under § 548(a)(1)(A) and Colorado law and constructively fraudulent under § 548(a)(1)(B) and Colorado law, and Appellant did not establish the good faith defense under § 548(c). 12 As to the December 2022 Transfer, the Bankruptcy Court concluded the following: • The transfer was an unauthorized postpetition transfer under § 549(a). 13 9 See Opinion at 38 in Appellant’s App. at 294. 10 Id. 11 Id. at 41 in Appellant’s App. at 297. 12 Id. 13 Id. at 41–42 in Appellant’s App. at 297–98. 4 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 5 of 30 As a result of these rulings, the Bankruptcy Court concluded Appellee could recover the Home Loan Transaction, the November 2022 Transfer, and the December 2022 Transfer or the value thereof for the bankruptcy estate under § 550. The Bankruptcy Court then concluded the avoided transfers were automatically preserved for the bankruptcy estate under § 551 and any claim Appellant filed against the estate was disallowed under § 502(d). Finally, the Bankruptcy Court denied Appellee’s request for multiplied damages under Colorado law. 14 II. Jurisdiction This Court has jurisdiction to hear timely filed appeals from “final judgments, orders, and decrees” of bankruptcy courts within the Tenth Circuit unless a party elects to have the district court hear the appeal. 15 No party elected to have the district court hear the appeal. Appellant timely filed her notice of appeal from the Opinion and Judgment, which are final orders. 16 Accordingly, this Court has jurisdiction to review the Opinion and Judgment. III. Issues on Appeal and Standard of Review Appellant presents five issues on appeal, 17 which we have distilled as follows: 14 Id. at 44–45 in Appellant’s App. at 300–01. 15 28 U.S.C. § 158(a)(1), (b)(1), (c)(1); Fed. R. Bankr. P. 8003, 8005. 16 Adelman v. Fourth Nat’l Bank and Tr. Co., N.A., of Tulsa (In re Durability, Inc.), 893 F.2d 264, 265–66 (10th Cir. 1990) (“[A]n order is final if it ends the litigation on the merits. . . . [T]he appropriate ‘judicial unit’ for application of these finality requirements in bankruptcy is . . . the particular adversary proceeding.”). 17 Appellant did not appear for oral argument, so the Court could not clarify her arguments. Appellant lists the following issues in her brief: “1. The bankruptcy court abused its discretion in disallowing Appellants evidence regarding consideration given for the Home Loan Transaction. . . . 2. The bankruptcy court abused its discretion when it 5 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 6 of 30 1. Did the Bankruptcy Court abuse its discretion in excluding Appellant’s evidence related to the Home Loan Transaction? 2. Did the Bankruptcy Court make erroneous factual findings? a. Did the Bankruptcy Court base its ruling on clearly erroneous factual findings by (a) reducing the amount of consideration given for the Home Loan Transaction, (b) discrediting Debtor’s testimony and finding him not credible, and (c) disallowing Appellant’s good faith defense concerning the Home Loan Transaction and the November 2022 Transfer? b. Did the Bankruptcy Court clearly err in its factual finding regarding the date of Debtor’s chapter 7 petition in its discussion of the Home Loan Transaction? c. Did the Bankruptcy Court clearly err in finding fraudulent intent in its conclusions concerning the Home Loan Transaction and the November 2022 Transfer? 3. Did the Bankruptcy Court err in its application of §§ 550 and 551 as to the Home Loan Transaction, the November 2022 Transfer, and the December 2022 Transfer? relied upon clearly erroneous factual findings to: a. Further reduce the amount of consideration given for the Home Loan Transaction to the point where it could not be considered as reasonable; b. Discredit the Debtors testimony and find him not credible and; c. Disallow Appellant[’]s claimed ‘Good Faith’ defense. . . . 3. The bankruptcy court erred in its factual finding regarding the date the Debtor filed his Petition for Chapter 7. . . . 4. The bankruptcy court abused its discretion in turning a blind eye to evidence and a deaf ear to testimony negativing fraudulent intent by the Debtor. . . . [and] 5. The bankruptcy court abused its discretion in its application of 11 U.S.C. § 550 and § 551.” Appellant’s Br. at 2–4. Appellant proceeds pro se on appeal, and her briefing is often unclear as to whether she is challenging only the conclusions involving the Home Loan Transaction, the November 2022 Transfer, or the December 2022 Transfer. Often, Appellant’s arguments about the Bankruptcy Court’s factual findings could, at least potentially, implicate all the conclusions of the Bankruptcy Court. The Court therefore addresses Appellant’s issues on appeal as they relate to each transfer, where applicable. 6 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 7 of 30 “[T]he trial judge’s decision to exclude the evidence is reviewed for an abuse of discretion.” 18 Under the abuse of discretion standard, this Court will not disturb a bankruptcy court’s decision unless the Court has “a definite and firm conviction that the lower court made a clear error of judgment or exceeded the bounds of permissible choice under the circumstances.” 19 A clear example of abuse of discretion occurs when a trial court “commits a legal error or relies on clearly erroneous factual findings.” 20 This Court “review[s] the factual findings of the bankruptcy court for clear error” 21 and “review[s] the bankruptcy court’s findings regarding intent under a clearly erroneous standard. Review under the clearly erroneous standard is significantly deferential, requiring a definite and firm conviction that a mistake has been committed.” 22 ‘“[W]here there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous,’” and ‘“an appellate court may not reverse the findings . . . even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.’” 23 This Court is to be “especially wary of finding clear error when the bankruptcy court’s factual findings are based on the 18 Perkins v. Silver Mountain Sports Club and Spa, LLC, 557 F.3d 1141, 1146 (10th Cir. 2009). See also Cartier v. Jackson, 59 F.3d 1046, 1048 (10th Cir. 1995) (“We review a [trial] court’s exclusion of evidence for an abuse of discretion.”). 19 United States v. Ortiz, 804 F.2d 1161, 1164 n.2 (10th Cir. 1986). 20 Cruz v. Farmers Ins. Exch., 42 F.4th 1205, 1210 (10th Cir. 2022) (internal citation omitted). 21 Fowler Bros. v. Young (In re Young), 91 F.3d 1367, 1370 (10th Cir. 1996). 22 In re Stewart, Nos. CO-09-026, CO-09-027, 2009 WL 3724977, at *2 (10th Cir. BAP Nov. 9, 2009) (unpublished) (internal quotation omitted). 23 In re Harmsen, 320 B.R. 188, 200–01 (10th Cir. BAP 2005) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985)). 7 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 8 of 30 credibility of witness testimony.” 24 Matters of law, including statutory interpretation, are reviewed de novo. 25 IV. Discussion As a preliminary matter, we are not persuaded by Appellee’s argument that the Court should reject Appellant’s issues on appeal involving review of the Bankruptcy Court’s factual findings because Appellant failed to provide a complete record on appeal. Local Rule 8018-1(e) provides in part that “[t]he appendix must contain all transcripts necessary for this Court’s review.” 26 Here, Appellant has included the Opinion and Judgment in her Appendix along with the transcript from the second day of the Trial, and no party or witness testified on the first day of Trial. Thus, the Court has an adequate record to evaluate the issues raised on appeal. A. The Bankruptcy Court did not abuse its discretion in excluding Appellant’s evidence. At the Trial, Appellant attempted to admit copies of signed receipts (Exhibits J and K), to which Appellee objected. Appellee’s counsel confirmed that the documents she received from Appellant were copies 27 despite having asked for originals and, as such, 24 J&R Inv. v. Anthony (In re Anthony), 658 F. App’x 924, 926–27 (10th Cir. 2016) (unpublished) (citing Mason v. Young (In re Young), 237 F.3d 1168, 1176 (10th Cir. 2001) (“[A] credibility determination . . . is properly the province of the trier of fact—in this case the bankruptcy court—, and we may not disturb that trier of fact’s credibility determinations on appeal.”)). 25 First Nat’l Bank of Durango v. Woods (In re Woods), 743 F.3d 689, 693–94 (10th Cir. 2014). 26 10th Cir. BAP L.R. 8018-1(e). 27 Tr. at 49 in Appellant’s App. at 354. 8 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 9 of 30 Appellee’s counsel could not verify the receipts. 28 The Bankruptcy Court noted that the objection involved the best evidence rule, which requires originals to be submitted. 29 The Bankruptcy Court did not admit Exhibits J and K pursuant to Federal Rules of Evidence 1002 and 1003 because Appellant did not produce the original documents. 30 On appeal, Appellant frames her primary argument as follows: because [Appellee] had seen the receipts numerous times before the trial, because the receipts were already in the record multiple times, because [Appellee] was afforded sufficient discovery, because [Appellee] did not offer any cogent or compelling evidence that the documents were not authentic, and because [Appellee] objected to the documents solely for the sake of gamesmanship, Appellant respectively moves this court to overrule the bankruptcy court and to consider the documents as part of Appellant’s $45,000 consideration for the Home Loan Transaction. 31 Alternatively, Appellant asks this Court to consider Debtor’s testimony supporting the existence of the alleged loans. 32 Federal Rule of Evidence 901(a) provides that to authenticate evidence, “the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is.” 33 Pursuant to Federal Rule of Evidence 1003, a duplicate is admissible unless a party raises a genuine question as to authenticity or any unfair circumstances. 34 28 Id. at 39 in Appellant’s App. at 344. 29 Id. at 41 in Appellant’s App. at 346. 30 Id. at 54, 56 in Appellant’s App. at 359, 361. 31 Appellant’s Br. at 7. 32 Id. (footnote omitted). 33 Fed. R. Evid. 901(a). 34 Fed. R. Evid. 1003. Further, the Tenth Circuit has held that “evidence offered to prove the contents of an original writing, recording, or photograph is not admissible, unless the original itself is also admitted.” United States v. Chavez, 976 F.3d 1178, 1194 9 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 10 of 30 Here, by not providing the original documents, Appellant did not meet her burden of satisfying the applicable evidentiary rules when the authenticity of the documents was questioned. Thus, the Bankruptcy Court did not abuse its discretion in excluding Exhibits J and K. B. The Bankruptcy Court did not make erroneous factual findings. 1. Debtor’s Credibility and the Home Loan Transaction Consideration In the Opinion, the Bankruptcy Court noted the following: The Debtor testified at trial that, prior to January 27, 2022, he made periodic payments to [Appellant] in the amount of $238, and that he started making such payments in March 2021. He said [he] had repaid $25,000 of the amount owed to [Appellant] by the time they signed the Promissory Note and Deed of Trust. But he signed the documents to ‘make it official.’ ... When asked why, if the Debtor had already repaid $25,000 to [Appellant], he agreed in the Promissory Note to repay her $45,000 plus interest, the Debtor testified that, in addition to the transfers evidenced by the cashiers’ checks, [Appellant] had given him cash ‘here and there’ and he knew he owed her at least $45,000, though he could not say or show how much cash [Appellant] had given him nor provide documentation showing that the cash transfers were loans. The Court finds that the Debtor’s testimony that [Appellant] provided consideration to him above the $28,896.00 evidenced by the cashiers’ checks (Exs. C-I) cannot be credited, as [Appellant] failed at trial to provide evidence containing specific details about any alleged cash transfers, such as testimony regarding the dates or amounts of any such cash transfers, let alone any corroborating documentary evidence, such as copies of bank account records. The Court also found the Debtor not to be credible.35 (10th Cir. 2020). See also Fed. R. Evid. 1002 (“An original writing, recording, or photograph is required in order to prove its content unless these rules or a federal statute provides otherwise.”). 35 Opinion at 16 in Appellant’s App. at 272. 10 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 11 of 30 Appellant takes issue with the Bankruptcy Court’s finding that Debtor had repaid $25,000 to Appellant by the time they signed the Promissory Note and deed of trust; rather, Appellant argues Debtor’s testimony signifies that $25,000 was paid at the time the testimony was given, not by the date the Promissory Note and deed of trust were signed. 36 Additionally, Appellant disagrees with the Bankruptcy Court’s finding that Debtor is not credible and argues the Bankruptcy Court misconstrued Debtor’s testimony when it stated in the Opinion that “[Debtor] said [he] had repaid $25,000 of the amount owed to [Appellant] by the time they signed the Promissory Note and Deed of Trust. But he signed the documents to ‘make it official.’” 37 Appellant argues the above statement used to discredit Debtor is erroneous and unsupported by the record. 38 Appellant adds that “it appears that most, if not all, of [] Debtor’s testimony does have record support.” 39 Here, the evidence demonstrates the Bankruptcy Court did not clearly err in finding that Debtor was not credible. Based on the record in its entirety, including Debtor’s conflicting testimony at the Trial and 341 Meeting 40 along with insufficient corroborating evidence regarding money transfers, the Bankruptcy Court’s credibility 36 Appellant’s Br. at 10–11. 37 Id. at 9 (citing Opinion at 16 in Appellant’s App. at 272). 38 Id. at 12. 39 Id. 40 At the 341 Meeting, when asked about the $5,000 cash advance from Rocky Mountain Law Enforcement Credit Union from December 1, 2022, Debtor answered by stating that the “money is being held by [Appellant].” Ex. B at 12:22–24, Response to Defendant’s Motion for Summary Judgment [Bankr. ECF No. 61-2]. At the Trial, Debtor stated that he “took a cash advance on December 1st to pay some other creditors.” Tr. at 75 in Appellant’s App. at 380. 11 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 12 of 30 determinations are plausible. Although there may be two permissible views of this evidence, the Bankruptcy Court’s choice between them cannot be clearly erroneous. 41 At the Trial, Appellant’s counsel questioned Debtor as follows: Q. And to make it clear, you began repaying the $45,000 after you entered into this promissory note? Or were you paying before then? A. I was paying her back before we made that $45,000 loan. Q. Okay. A. Because she had given me money all throughout that year. I just, we just made it official, and then, you know, a repayment plan was set, an interest rate was set. All of that stuff was, like, official at that point. So I was paying her back before we even did that. Q. Before that. A. Yeah. Q. So in your estimation, you’ve repaid roughly $25,000. A. At this point, yes. 42 The testimony shows Appellant’s counsel asked Debtor whether he began repaying Appellant after the Promissory Note, to which Debtor clarified that he “was paying [Appellant] back before [they] even did that,” 43 referring to the Promissory Note. Given the above, the record indicates the Bankruptcy Court did not clearly err in finding that Debtor had paid Appellant $25,000 by the time they signed the Promissory Note and deed of trust. “Where there are two permissible views of the evidence,” here being 41 See Anderson v. City of Bessemer City, 470 U.S. 564, 573–74 (1985) (“If the [trial] court’s account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous.”). 42 Tr. at 62–63 in Appellant’s App. at 367–68. 43 Id. at 63 in Appellant’s App. at 368. 12 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 13 of 30 whether Debtor had paid Appellant $25,000 by the time of the Home Loan Transaction, “the factfinder’s choice between them cannot be clearly erroneous.” 44 2. Good Faith Defense The Bankruptcy Court noted that good faith should be measured objectively, and the determination requires a two-part inquiry into “whether the circumstances would place a reasonable person on inquiry of a debtor’s fraudulent purpose” and “whether a diligent inquiry would have discovered the fraudulent purpose.” 45 The Bankruptcy Court applied a “reasonable person” standard and “determine[d] that the good faith defense is not available to [Appellant]” 46 under § 548(c) and Colo. Rev. Stat. § 38-8-109(1) based in part on the following circumstances: [Appellant] is well-educated and, as a realtor, is quite familiar with the ins and outs of real estate transactions such as the Home Loan Transaction. She was aware that the Debtor was struggling financially and, as his mother, agreed to help him. In her prior dealings with the Debtor, [Appellant] gave the Debtor gifts and made him loans based on mere promises to repay. She did not document the transactions at all (aside from keeping copies of cashier’s checks) or require him to provide security for the loans. Indeed, it seems there was no need for security, as the Debtor repaid $25,000 of the $28,896 loaned to him by [Appellant] within the same year. It was only after the second judgment entered in favor of Mr. Callahan that [Appellant] demanded that the Debtor provide her with security, in the form of the Deed of Trust, before she would agree to make him another loan. The Court does not believe this is a mere coincidence. To the contrary, [the] Court believes and finds that [Appellant] required the Debtor to sign the Promissory Note and Deed of Trust precisely because she had a general knowledge about his financial troubles, including the judgments, and knew that, by doing so, the Debtor would both protect her claim and ensure that the previously unencumbered value of the Property was protected from the Debtor’s creditors. The Court also finds that [Appellant] knew that the Debtor had 44 Anderson, 470 U.S. at 574. 45 Opinion at 33–34 in Appellant’s App. at 289–90 (citation modified). 46 Id. at 35 in Appellant’s App. at 291. 13 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 14 of 30 repaid her $25,000 such that the value provided in exchange for the Home Loan Transaction was substantially less than the value of the obligation incurred by the Debtor in signing the Promissory Note and Deed of Trust. 47 The Bankruptcy Court relied on the same analysis in rejecting the good faith defense in the § 548(a)(1)(A) analysis for the November 2022 Transfer. 48 Appellant argues that, but for the Bankruptcy Court’s determinations on consideration, Appellant should have been allowed to invoke the good faith defense. 49 Appellant adds that the only factor in support of denying the good faith defense was that Appellant indirectly knew Debtor was struggling financially but that this factor is insufficient to support the Bankruptcy Court’s ruling. The good faith defense standard is set forth in both the Code and Colorado law and provides that certain transfers are not voidable when the transferee or obligee acted in good faith. 50 Further, 47 Id. at 34–35 in Appellant’s App. at 290–91. 48 Id. at 40 in Appellant’s App. at 296 (“For the same reasons the Court found that the good faith defense did not shield the Home Loan Transaction from avoidance as an actual fraudulent transfer, the Court finds that the November 29, 2022 Transfer is not shielded.”). 49 Appellant’s Br. at 15 (“[A]bsent the bankruptcy court’s manufactured statement by the Debtor, applied to defeat both requisite prongs of the good faith defense, the bankruptcy court has not and cannot deny Appellant’s invoked good faith defense with any other evidence and for any other reason.”). 50 See 11 U.S.C. § 548(c) (“Except to the extent that a transfer or obligation voidable under this section is voidable under section 544, 545, or 547 of this title, a transferee or obligee of such a transfer or obligation that takes for value and in good faith has a lien on or may retain any interest transferred or may enforce any obligation incurred, as the case may be, to the extent that such transferee or obligee gave value to the debtor in exchange for such transfer or obligation.”); see also Colo. Rev. Stat. § 38-8- 109(1) (“A transfer or obligation is not voidable under section 38-8-105 (1)(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.”). 14 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 15 of 30 [i]n the Tenth Circuit, ‘good faith under [11 U.S.C.] § 548(c) should be measured objectively.’ Determining whether a transferee has established good faith under Section 548(c) requires a two-part inquiry: the Court must determine whether the ‘circumstances would place a reasonable person on inquiry of a debtor’s fraudulent purpose,’ and if so, whether ‘a diligent inquiry would have discovered the fraudulent purpose.’ In applying the ‘reasonable person’ standard, the Court must take into account the transferee’s individual circumstances, including their sophistication as an investor and whether they had actual knowledge of the fraud. 51 Here, the Bankruptcy Court did not clearly err in finding that (1) Appellant “is well-educated and, as a realtor, is quite familiar with the ins and outs of real estate transactions such as the Home Loan Transaction[,]” (2) Appellant “was aware that the Debtor was struggling financially and, as his mother, agreed to help him[,]” and (3) Appellant “required the Debtor to sign the Promissory Note and Deed of Trust precisely because she had a general knowledge about his financial troubles, including the judgments.” 52 The record shows Appellant is a well-educated realtor 53 and knew that Debtor had financial troubles 54 according to Appellant’s deposition. Further, the record supports the finding that prior to the entry of the Second Award, transactions between Debtor and Appellant lacked formal documentation, 55 whereas for the Home Loan 51 Wagner v. Ultima Homes, Inc. (In re Vaughan Co., Realtors), 493 B.R. 597, 610 (Bankr. D.N.M. 2013) (quoting In re M & L Bus. Mach. Co., 84 F.3d 1330, 1338–39 (10th Cir. 1996)). 52 Opinion at 34–35 in Appellant’s App. at 290–91. 53 Dep. at 13 in Appellant’s App. at 113 (Appellant stated the following: “I have my own real property management and property renovation business. . . . I have an associate’s degree, two bachelor’s degrees, and some master’s study.”). 54 Id. at 79 in Appellant’s App. at 129 (Appellant stated that “[Debtor] was having a hard time paying these expenses with the divorce and the child custody” and noted that in 2021 she “could tell [Debtor] was struggling financially.”). 55 See Tr. at 12–13 in Appellant’s App. at 317–18. The following excerpt is from Debtor’s direct examination: “Q. [] In December of 2021, when you asked her for 15 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 16 of 30 Transaction, which took place shortly after issuance of the Second Award, Appellant required security. Additionally, even if the Bankruptcy Court’s findings regarding the consideration provided in the Home Loan Transaction were erroneous, the Bankruptcy Court’s previously mentioned findings are sufficient to determine that “the circumstances would place a reasonable person on inquiry of a debtor’s fraudulent purpose” and “a diligent inquiry would have discovered the fraudulent purpose.” 56 The same conclusions apply to the November 2022 Transfer. 3. Petition Date Reference The Bankruptcy Court stated that the Debtor “filed for Chapter 7 protection on December 2, 2020” and “[a]t the time [Debtor] filed for bankruptcy relief, Colo. Rev. Stat. § 38-41-201(1)(b) provided for a general homestead exemption in the amount of $105,000.” 57 Appellant argues the Bankruptcy Court erred by stating the incorrect filing $10,000, she told you that would be the terms on which she would lend additional monies to you? A. Yes. Q. Okay. What about monies that she had lent to you before December? A. Before December, I mean, like I said, I think maybe she just felt bad for me. So she gave me $5,000 here, you know, $2,000 there, $4,000 there. Q. That she gave you, or did she loan you money? A. She gave it to me and she loaned it to me. Q. Okay. And how were those transactions memorialized or covered? A. Those transactions were just a, I promise I will pay you back. Q. Is it, is it verbal? A. Just a verbal transaction, yeah.” 56 In re M & L Bus. Mach. Co., 84 F.3d at 1338. Appellant denies knowing that the First Award and Second Award were recorded. Dep. at 75 in Appellant’s App. at 128 (Counsel for Appellee asked Appellant, “Did you know that Mr. Callahan recorded these judgments in the County of Adams?” Appellant answered, “Like I said, I’ve heard that name. Never met him. Don’t know who he is.” Counsel for Appellee then continued: “All I’m asking is did you know these documents were recorded. If you don’t know, you don’t know.” Appellant responded by saying “I don’t know.”). However, “a diligent inquiry” could have revealed the recorded judgments, and coupled with Appellant’s sophistication in real estate, would have led to the discovery of Debtor’s fraudulent purpose. 57 Opinion at 22 n.8 in Appellant’s App. at 278 (emphasis added). 16 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 17 of 30 date and appears to contend that this error led to an erroneous finding regarding the available equity in Debtor’s real property for creditors, thus demonstrating the Bankruptcy Court’s bias. 58 Admittedly, the Bankruptcy Court’s statements regarding Debtor’s bankruptcy filing date (December 2020 instead of December 2022) and homestead exemption amount of $105,000 instead of $250,000 are incorrect. 59 However, even if Debtor were entitled to a different value of the homestead exemption, 60 this does not affect whether the Home Loan Transaction and November 2022 Transfer were properly avoidable. Thus, the Bankruptcy Court’s errors here are harmless. 61 4. Fraudulent Intent The Bankruptcy Court outlined the following badges of fraud under § 548: whether the transfer was to an insider; whether the debtor retained possession or control of the property after the transfer; concealment of the transfer; pending or threatened litigation against the debtor at the time of transfer; a transfer of substantially all of the debtor’s assets; absconding by the debtor; removal or concealment of assets; reasonably equivalent value in exchange for the transfer; the debtor’s insolvency at the time of the transfer; the proximity in time of the transfer to the incurrence of a substantial debt; and 58 Appellant’s Br. at 17 (“Appellant respectfully moves this Court to see the error for what it is, prejudice. The bankruptcy court’s Opinion has numerous factual findings that are in error and all of them, unsurprisingly, favor the Trustee. Appellant contends it can, therefore, be said that the mindset of the bankruptcy court is not objective, and/or unprejudiced, but quite the contrary.”). 59 On the date of Debtor’s bankruptcy filing, the homestead exemption under Colo. Rev. Stat. § 38-41-201(1)(a) was $250,000 if owner-occupied and $350,000 under Colo. Rev. Stat. § 38-41-201(1)(b) if occupied by an owner who is elderly or disabled. 60 Marcus v. Zeman (In re Marcus), 1 F.3d 1050, 1051 (10th Cir. 1993) (Generally, “the law applicable at the date of filing controls exemptions.”). 61 “A harmless error is one that does not have a substantial influence on the outcome of the trial; nor does it leave one in grave doubt as to whether it had such effect.” United States v. Jones, 44 F.3d 860, 873 (10th Cir. 1995). 17 BAP Appeal No. 25-23 Docket No. 30 Filed: 10/23/2026 Page: 18 of 30 a transfer of substantial business assets to a lienor followed by a subsequent transfer of such assets to an insider of the debtor. 62 In its analysis, the Bankruptcy Court held that the following factors supported finding fraud as to the Home Loan Transaction: 1. the Home Loan Transaction was a