The consideration that a transferee of property from the debtor provides to the debtor in exchange for the transfer. Where the debtor does not receive reasonably equivalent value in exchange for a transfer, the transfer is subject to avoidance as a fraudulent transfer (see Constructively Fraudulent Transfer).

In the context of a fraudulent transfer action under Section 548, the concept of “value” means, in addition to the obvious concept of property that the creditor provides to the debtor, the “satisfaction or securing of a present or antecedent debt of the debtor.” Accordingly, a lender gives “value” in exchange for the debtor’s payment of a debt to the lender if the lender applies that payment to satisfy the debtor’s debt. Where the debtor transfers to the lender an interest in the debtor’s property in the form of a lien on the debtor’s property, the lender is said to have given “value” in exchange for that transfer by securing the debtor’s debt with the lien (which makes perfect sense, since the debtor could have instead liquidated the property rather than providing a lien against it and then used the proceeds to make a payment against the debt).

Even in the case of a payment made by the debtor to satisfy antecedent debt, the transfer to the lender could theoretically be a constructively fraudulent transfer if the “value” supplied by the lender was not “reasonably equivalent value.” For example, if the lender accepted a $100 payment from the debtor but reduced the debtor’s debt by less than $100, a bankruptcy court might find that the debtor received less than reasonably equivalent value.

Bankruptcy Code § 548(d)(2)(A). See also Constructively Fraudulent Transfer, Fraudulent Transfer, Intentionally Fraudulent Transfer, Reasonably Equivalent Value.

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