Case Summary:
The Debtor filed Chapter 7, then converted to Chapter 13 when the Trustee pursued preference avoidance actions.  The Chapter 7 Trustee then objected to confirmation of the Chapter 13 plan, arguing that it failed to meet the best interests test because of the potential yield of avoidance actions in a Chapter 7.  The Court held that the plan failed to meet the best interests test, because the Chapter 7 Trustee was reasonably likely to have avoided certain transfers as preferential.  The Court also held, however, that the Trustee was not reasonably likely to have sold certain property, since the Debtor held it in a constructive trust.  Further, the Court found no violation of the requirement that a plan be proposed in good faith.

Statute/Rule References:
11 U.S.C. § 547(b) -- Preferences
11 U.S.C. § 547(c)(1) -- Preferences
11 U.S.C. § 547(c)(1) -- Preferences
11 U.S.C. § 1325(a)(3)
11 U.S.C. § 1325(a)(4)
Fed. R. Bankr. P. Rule 4003(c) -- Exemptions - Burden of Proof

Key Terms:
Best Interests
Constructive Trust
Good Faith
Joint Tenancy
Plan Confirmation
Preferences