4 ABR 148 UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA

In re 4M 2B INVESTORS, an Alaska general partnership, EIN: 92-0143791 Debtor.	Case No. A94-00623-HAR Chapter 11 (Jointly Administered) ORDER DISALLOWING PROOFS OF CLAIM BY CITY OF KENAI AGAINST McLANE WOMEN
DAPHNE McLANE, Debtor.	Case No. A95-00011-HAR
SUSAN McLANE, Debtor.	Case No. A95-00012-HAR
LINDA McLANE, Debtor.	Case No. A95-00013-HAR
M. SCOTT McLANE, Debtor.	Case No. A95-00014-HAR
MICHAEL McLANE, Debtor.	Case No. A95-00015-HAR
STAN A. McLANE, Debtor.	Case No. A95-00016-HAR
STANLEY S. McLANE, Debtor.	Case No. A95-00017-HAR
MARIA VICTORIA McLANE, aka Maria V. Limcauco, Debtor.	Case No. A95-00242-HAR

The City of Kenai filed a proof of claim against the McLane Women (Daphne McLane, Susan McLane, Linda McLane, and Maria McLane) in their respective cases in the amount of $1,281,036.19. Objections were filed by the individual debtors to the proofs of claims filed against the McLane Women.

The City of Kenai commenced a fraudulent transfer action in state 4 ABR 149 court against the McLane Women prepetition. After the bankruptcy was filed, the right to proceed with the avoidance action, and any recovery, became property of the estate. The trustee or debtor-in-possession is the one generally entitled to prosecute the avoidance action. I.C.C. v Transcon Lines, 990 F2d 1503, 1516 (9th Cir 1992), vacated on other grounds 113 SCt 2955 (1993); In re Mortgagemerica Corp., 714 F2d 1266, 1275 (5th Cir 1983).

If the fraudulent transfer proceeding were to go to trial on the merits and the McLane Women prevailed as defendants, this would of course negate the proofs of claim of the City, which are not based on any personal liability of the McLane Women, but only because of the alleged fraudulent transfers.

On the other hand, if the fraudulent transfer adversary proceeding is tried and is successful in establishing a fraudulent transfer, the property involved will not be available directly to the City of Kenai but only to the estate. In re Morgageamerica Corp. Thus, the City has neither a direct claim against the McLane Women, nor a claim against any of their property which might be a grounds for a claim under 11 USC § 1111(b)(1)(A), and the City's proofs of claims must be disallowed.

Therefore, IT IS ORDERED that Proof of Claim No. 6 in the amount of $1,281,036.19 against Daphne McLane (filed in Case No. A95-00011-HAR); Proof of Claim No. 7 in the amount of $1,281,036.19 against Susan McLane (filed in Case No. A95-00012-HAR); Proof of Claim No. 9 in the amount of $1,281,036.19 against Linda McLane (filed in Case No. A95-00013-HAR); and Proof of Claim No. 3 in the amount of $1,281,036.19 against Maria Victoria McLane (filed in Case No. A95-00242-HAR) are all DISALLOWED. The court grants 30 days from the date this order is entered to file a notice of appeal or a motion to reconsider, alter, or amend this order.

DATED: September 22, 1995