dissenting:
Relying on the majority ruling in In re Madrid, 21 B.R. 424 (9th Cir.BAP 1982), aff'd on other grounds, 725 F.2d 1197 (9th Cir.1984), cert. denied, 469 U.S. 833, 105 S.Ct. 125, 83 L.Ed.2d 66 (1984), the majority here restates the view that a non-collusive and regularly conducted nonjudicial foreclosure sale creates in effect an irrebutta-ble presumption that the consideration received at such a sale is “reasonably equivalent value” for purposes of Bankruptcy Code § 548(a)(2).1 While stare decisis does not require us to follow the BAP ruling in Madrid since that ruling was not adopted by the Circuit on appeal, it is appropriate that the reasoning of that ruling be considered, as evidenced by the majority in the matter before us.2
Since the issuance of this Court’s 1982 opinion in Madrid, a substantial body of case law has developed in relation to the meaning of the term “reasonably equivalent value” under Code § 548(a)(2). There have emerged three approaches. The first is that articulated by the Bankruptcy Appellate Panel’s Madrid majority in its 1982 decision. A number of bankruptcy courts and one circuit court have followed the BAP’s approach on the § 548(a)(2) question. In the Matter of Winshall Settlor’s Trust, 758 F.2d 1136 (6th Cir.1985); In re Verna, 58 B.R. 246 (Bankr.C.D.Cal.1986); In re Upham, 48 B.R. 695 (Bankr.W.D.N.Y.1985); and In re Strauser, 40 B.R. 868 (Bankr.N.D.Ohio 1984).3
The second line of cases follows the Fifth Circuit’s decision in Durrett v. Washington Nat’l Ins. Co., 621 F.2d 201 (5th Cir.1980), a case decided under § 67(d) of the prior Bankruptcy Act. This superseded section held that a fraudulent transfer was one where the debtor did not receive “fair consideration,” as opposed to the Code’s use of the term “reasonably equivalent value.” The trial court had found no fraudulent conveyance in a foreclosure sale price which was 57.7% of fair market value. The Fifth Circuit reversed and noted that it found no case in which a court had approved a transaction where property sold for less than 70% of fair market value. This reasoning has come to stand for a somewhat mechanical analysis of determining whether the price paid at a foreclosure sale is “an acceptable percentage of the fair market value of the property.” In re Bundles, 856 F.2d 815, 820 (7th Cir.1988). The Durrett court’s approach has been followed by courts outside the Fifth Circuit. E.g., In re Thrifty Dutchman, Inc., 97 *752B.R. 101 (Bankr.S.D.Fla.1988); In re Cole, 81 B.R. 326 (Bankr.E.D.Pa.1988); Matter of IPI Liberty Village Assoc., 92 B.R. 882 (Bankr.W.D.Mo.1987).
The third line of cases may now be described as the majority position. The leading case is In re Bundles, 856 F.2d 815 (7th Cir.1988). That case reflects, in my view, what should be the law the in this area. The Seventh Circuit held:
In our view, in defining reasonably equivalent value, the court should neither grant a conclusive presumption in favor of a purchaser at a regularly conducted, non-collusive foreclosure sale, nor limit its inquiry to a simple comparison of the sale price to the fair market value. Reasonable equivalence should depend on all the facts of each case.
Id. at 824. Thereafter, the court stated that “[i]t would be appropriate to permit a rebuttable presumption that the price obtained at the foreclosure sale represents reasonably equivalent value” (emphasis in original); that the foreclosure transaction must be examined “in its totality," and specified some of the factors to be considered: “whether there was a fair appraisal of the property, whether the property was advertised widely, and whether competitive bidding was encouraged.” Id. This analysis has been adopted, in one form or another, by the courts of appeals for three other circuits that have considered the question. In re Morris Communications NC, Inc., 914 F.2d 458 (4th Cir.1990); In re Littleton, 888 F.2d 90 (11th Cir.1989); and In re Hulm, 738 F.2d 323 (8th Cir.1984), cert. denied, 469 U.S. 990, 105 S.Ct. 398, 83 L.Ed.2d 331 (1984). Many district and bankruptcy courts follow this case-by-case approach as well. E.g., In re Brown, 119 B.R. 413 (S.D.N.Y.1990); In re Barrett, 118 B.R. 255 (E.D.Pa.1990); In re Pittsburgh Cut Flower Co., Inc., 124 B.R. 451 (Bankr.W.D.Pa.1991); In re Garrison, 48 B.R. 837 (D.Colo.1985); In re DeVito, 111 B.R. 529 (Bankr.W.D.Pa.1990); In re National Environmental Systems Corp., 111 B.R. 4 (Bankr.D.N.H.1989); In re Lindsay, 98 B.R. 983 (Bankr.S.D.Cal.1989); In re General Indus., Inc.. 79 B.R. 124 (Bankr.D.Mass.1987); In re Pruitt, 72 B.R. 436 (Bankr.E.D.N.Y.1987). There are variants to re-examination of consideration, as in the case of Barrett v. Commonwealth Federal S & L Assoc., 939 F.2d 20 (3d Cir.1991), holding that the sale price was subject to a reasonably equivalent value test but that the reasonable value was to be measured by other sheriff’s sales and not private sales.
In the present case, the trial court utilized Madrid’s irrebuttable presumption analysis and therefore did not develop the record in the manner envisioned by the Seventh Circuit in Bundles and by the other courts cited above. In these circumstances, I would reverse the bankruptcy court’s finding that no fraudulent conveyance occurred, and remand the case for further factual development of the totality of the circumstances relating to the foreclosure sale.
I therefore respectfully dissent.
. Bankruptcy Code § 548(a) provides in pertinent part: The trustee may avoid any transfer of an interest of the debtor in property ... that was made or incurred within one year before the date of the filing of the petition, if the debtor voluntarily or involuntarily—
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2(A) received less than a reasonably equivalent value in exchange for such transfer or obligation;
. When the BAP’s decision in Madrid was appealed, the Ninth Circuit declined to adopt the reasoning of the majority and instead affirmed on the grounds that no "transfer" occurred at the time of the foreclosure sale. 725 F.2d at 1200-01. The Ninth Circuit’s ruling thereby became the law of the case in Madrid. Thereafter, the 1984 Bankruptcy Amendments revised the Bankruptcy Code’s definition of "transfer,” now found at 11 U.S.C. § 101(54), to make it clear that a foreclosure sale is a transfer. See In re Ehring, 900 F.2d 184, 187 (9th Cir.1990) (where the Ninth Circuit implicitly acknowledged that Congress in the 1984 Amendments reversed the Madrid holding). It is questionable that the displacement by Congress of the Ninth Circuit Madrid ruling served to revive the BAP Madrid decision. Thus, given this history, the present viability of original Madrid is doubtful. See In re Verna, 58 B.R. 246 (Bankr.C.D.Cal.1986) (”[i]n overruling the Ninth Circuit’s Madrid decision, Congress did not reinstate the Ninth Circuit Bankruptcy Appellate Panel’s Madrid decision ...”).
.One of the proposed components of the 1984 Bankruptcy Amendments would have adopted the BAP’s Madrid rule and established an irre-buttable presumption of reasonably equivalent value in the event of a regularly conducted non-collusive foreclosure sale. The Congress declined to adopt the proposal without explanation and, consequently, the legislative history in this regard is inconclusive.