Matter of Holloway ( 1992 )


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  •               IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT
    ______________________
    No. 91-1991
    Summary Calendar
    ______________________
    IN THE MATTER OF:   PAT S. HOLLOWAY,
    Debtor.
    BROWNING INTERESTS,
    Appellants,
    versus
    LINDA W. ALLISON,
    Appellee.
    __________________________________________________________________
    Appeal from the United States District Court for the
    Northern District of Texas
    _________________________________________________________________
    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    (March 23, 1992)
    Before JOLLY, DAVIS, and SMITH, Circuit Judges.
    E. GRADY JOLLY, Circuit Judge:
    The Browning Interests1 appeal from the district court's
    judgment affirming the judgment of the bankruptcy court which
    1
    Jane H. Browning, individually and as Co-Independent
    Executrix of the Estate of William W. Browning, Jr., Deceased;
    Michael G. Starnes, individually and as Co-Independent Executor of
    the Estate of William W. Browning, Jr., Deceased, and as Trustee
    for Katherine Louise Browning Cook, Averille Adams Browning Dawson,
    William Webb Browning, III, Winifred Fallon Browning Vaughn, and
    Robert   Holland   Browning;    Katherine   Agnes   Land   Starnes,
    individually; Katherine Louise Browning Cook, individually;
    Averille Adams Browning Dawson, individually; William Webb
    Browning, III, individually; Winifred Fallon Browning Vaughn,
    individually; and Robert Holland Browning, individually.
    refused to set aside as a fraudulent conveyance the transfer of a
    security interest from the Debtor, Pat S. Holloway ("Holloway") to
    one of his ex-wives, Linda W. Allison ("Allison"). Under a correct
    application    of    the   law,    the    evidence       can    only     support   the
    conclusion that Allison is an insider; therefore, the transfer of
    the security interest is voidable as a fraudulent conveyance.
    Accordingly, we reverse the judgment of the district court, vacate
    the judgment of the bankruptcy court, and remand the case for entry
    of judgment in favor of the Browning Interests in accordance with
    this opinion.
    I
    Allison and Holloway were married to each other for twenty
    years, from 1949 to 1969, and have three children in common.                        On
    November 11, 1979, Holloway filed a Chapter 11 reorganization case,
    which was converted to a Chapter 7 liquidation case in 1982.
    Beginning January 5, 1984, and continuing through February 7, 1989,
    Allison loaned him $326,337.05, initially without any collateral.
    According to Allison, the loans were made "to provide for his
    sustenance and living expenses incurred due to the financial
    hardship    brought     upon      Holloway         by   his    lengthy    bankruptcy
    proceedings."
    In    1986,    Holloway   obtained        a    judgment    for    approximately
    $1,400,000 ("the HECI Judgment") against the HECI Exploration
    Company Employees' Profit Sharing Plan ("the Plan").                     On February
    5, 1987, Holloway executed a Collateral Assignment and Security
    -2-
    Agreement in favor of Allison granting a security interest in the
    HECI Judgment.
    Because there were numerous claims to the proceeds of the HECI
    Judgment, the Plan filed an adversary proceeding interpleading the
    funds into the registry of the bankruptcy court.           The claimants
    initially included Holloway's second wife, Robbie Holloway, and the
    Internal Revenue Service.        The Browning Interests, who hold a
    $72,000,000 judgment against Holloway, also actively participated
    in the proceedings before the bankruptcy court.
    In addition, Holloway made several unsuccessful attempts to
    obtain the funds. First, he attempted to have the bankruptcy court
    disburse the funds to him in satisfaction of his alleged pro se
    attorney's fees.   He then attempted to have the funds declared his
    exempt property under Texas law.     Next, he tried to have the funds
    declared the community property of his marriage to his third and
    current wife, Brenda Holloway, and to obtain enforcement of an
    alleged partition agreement.     Holloway later voluntarily dismissed
    his claim based on the alleged partition agreement.
    On February 27, 1989, the Government filed a motion for relief
    from the automatic stay so that it could file tax liens and levy on
    the funds in the registry of the bankruptcy court.        On March 21 and
    22,   1989,   Allison   caused   financing   statements   to   be   filed,
    perfecting her security interest in the HECI Judgment.          Although
    Allison was aware of the claims of the Browning Interests and the
    Government, as well as Holloway's efforts to obtain the funds, she
    -3-
    made no effort to assert her claim to a portion of the funds until
    she filed her Motion to Determine Status of Claim on March 31,
    1989.   Shortly thereafter, Holloway, in his role as Trustee of his
    children's trusts, asserted a claim to $284,892.46 of the funds,
    plus interest and attorney's fees, pursuant to an alleged security
    agreement dated February 5, 1987, recorded on April 19, 1989,
    securing loans allegedly made by the trusts to Holloway.
    On May 8, 1989, the United States filed four Notices of
    Federal Tax Liens against Holloway totaling $4,433,176.48.
    II
    The case was tried in bankruptcy court to determine the
    validity and priority of Allison's claim to the proceeds of the
    HECI Judgment.   The bankruptcy court entered judgment in favor of
    Allison in the amount of $364,346.47, plus additional interest and
    attorney's fees, to be paid out of the funds on deposit in the
    registry of   the   court.   The    bankruptcy   court's   judgment   was
    affirmed by the district court.          Disbursement of the funds was
    stayed pending appeal.   The Browning Interests and the Government
    appealed from the district court's judgment, but the Government
    settled with Holloway and dismissed its appeal.
    III
    The Browning Interests contend that the collateral assignment
    to Allison is avoidable as a fraudulent conveyance under Tex. Bus.
    Com. Code Ann. § 24.006(b), and that the bankruptcy and district
    courts erred in holding that Allison was not an "insider."
    -4-
    The bankruptcy court's findings of fact "will not be set aside
    unless clearly erroneous."          Matter of Delta Towers, Ltd., 
    924 F.2d 74
    , 76 (5th Cir. 1991).             However, "when a finding of fact is
    premised on an improper legal standard, that finding loses the
    insulation of the clearly erroneous rule."              Matter of Fabricators,
    Inc., 
    926 F.2d 1458
    , 1464 (5th Cir. 1991).              "Conclusions of law, on
    the other hand, are subject to plenary review on appeal."                   
    Id. Transfers made
    after September 1, 1987 are governed by the
    Uniform Fraudulent         Transfer    Act,    Tex.    Bus.   &   Com.   Code   Ann.
    §§   24.001,   et   seq.    (West     1987).     The    transfer    at   issue    is
    Holloway's granting of the security interest to Allison, which is
    deemed to have been made when it was filed of record so as to be
    perfected.     Tex. Bus. & Com. Code Ann. § 24.007(1)(B).                  Section
    24.006(b) provides:
    A transfer made by a debtor is fraudulent as to a
    creditor whose claim arose before the transfer was
    made if the transfer was made to an insider for an
    antecedent debt, the debtor was insolvent at that
    time, and the insider had reasonable cause to
    believe that the debtor was insolvent.
    The record establishes, and the bankruptcy court found, that:
    (1) the Browning Interests' claims arose prior to the transfer,2
    2
    Allison contends that the Browning Interests have not
    satisfied their burden of proof under § 24,006(b) because they
    introduced no evidence to prove their status as a present creditor
    of Holloway whose claim arose before the transfer was made.
    Allison made no such contention before the bankruptcy court, and
    that court found that, with the exception of Allison's status as an
    insider, all of the elements of § 24.006(b) were satisfied. It is
    clear and undeniable from the record that the Browning Interests'
    have a $72,000,000 judgment against Holloway and that their status
    -5-
    (2) the transfer was for an antecedent debt, (3) Holloway was
    insolvent at the time of the transfer, and (4) Allison knew that
    Holloway was insolvent.      Therefore, the only disputed issue is
    whether Allison is an "insider".          Section 24.002(7) defines an
    "insider" as follows:
    (7) "Insider" includes:
    (A)    if the debtor is an individual:
    (i) a relative of the debtor or of
    a general partner of the debtor;
    (ii) a partnership in          which     the
    debtor is a general partner;
    (iii) a general partner in a
    partnership described in Subparagraph
    (ii) of this paragraph; or
    (iv) a corporation of which the
    debtor is a director, officer, or person
    in control.
    Tex. Bus. Com. Code Ann. § 24.002(7) (emphasis added).
    The bankruptcy court held that Allison was not an insider,
    apparently   because   she   did   not   fit   within   one   of    the   four
    categories listed in the statute:
    Allison was an ex-wife of twenty years whose only
    substantial contact with Debtor was to provide him
    with funds to help defray living and legal
    expenses.    "Insider" is narrowly defined in §
    24.002(7). Allison is not a "relative" under the
    definition of § 24.002(11) or under Texas law
    because divorce terminates the marital relation.
    Allison is not an insider; thus, Uniform Fraudulent
    Transfer Act § 24.006(b) does not apply.
    as a present creditor whose claim arose prior to the transfer at
    issue.
    -6-
    Memorandum Opinion at 5 (citation omitted; emphasis added).                    The
    bankruptcy     court's    finding      was     based   upon     an     erroneous
    interpretation of the law.     As the Texas Court of Appeals in Dallas
    recently made clear, the UFTA's definition of "insider" is not
    intended to limit an insider to the four listed subjects. Instead,
    "the drafters provided the list for purposes of exemplification."
    J.   Michael   Putman,    M.D.P.A.    Money     Purchase     Pension    Plan    v.
    Stephenson, 
    805 S.W.2d 16
    , 18 (Tex. App.--Dallas 1991, no writ).
    The UFTA's definition of "insider" is very similar to the
    definition in the Bankruptcy Code, 11 U.S.C.A. § 101(31) (West
    Supp. 1991), and both parties agree that cases interpreting §
    101(31) are instructive.      Collier on Bankruptcy states that "[a]n
    `insider' generally is an entity whose close relationship with the
    debtor subjects any transactions made between the debtor and such
    entity to heavy scrutiny."         2 Collier on Bankruptcy ¶ 101.31 at
    101-87 (15th ed. 1991).        The legislative history of § 101(31)
    defines an insider as a person or entity with "a sufficiently close
    relationship with the debtor that his conduct is made subject to
    closer scrutiny    than    those     dealing    at   arm's   length    with    the
    debtor."     S. Rep. No. 95-989, 95th Cong. 2d Sess., reprinted in
    1978 U.S. Code Cong. & Admin. News 5787, 5810.
    The cases which have considered whether insider status exists
    generally have focused on two factors in making that determination:
    (1) the closeness of the relationship between the transferee and
    the debtor; and (2) whether the transactions between the transferee
    -7-
    and the debtor were conducted at arm's length.                 E.g., In re
    Friedman, 
    126 B.R. 63
    , 70 (9th Cir. B.A.P. 1991) ("insider status
    may be based on a professional or business relationship with the
    debtor, in addition to the Code's per se classifications, where
    such relationship compels the conclusion that the individual or
    entity has a relationship with the debtor, close enough to gain
    advantage attributable simply to affinity rather than to the course
    of business dealings between the parties"); In re Schuman, 
    81 B.R. 583
    , 586 (9th Cir. B.A.P. 1987) ("The tests developed by the courts
    in determining who is an insider focus on the closeness of the
    parties and the degree to which the transferee is able to exert
    control or influence over the debtor."); In re Benson, 
    57 B.R. 226
    ,
    229 (Bankr. N.D. Ohio 1986) (an insider may be anyone "whose close
    relationship with the debtor subjects transactions made between the
    two parties to careful scrutiny"); Matter of Lemanski, 
    56 B.R. 981
    ,
    983 (Bankr. W.D. Wis. 1986) (a transferee is an insider if, as a
    matter of fact, he exercises such control or influence over the
    debtor as to render their transaction not arms-length"); Matter of
    Montanino, 
    15 B.R. 307
    , 310 (Bankr. D.N.J. 1981) (an insider "is
    one who has such a relationship with the debtor that their dealing
    with   one   another   cannot   be   characterized   as   an   arm's-length
    transaction").
    -8-
    IV
    A
    The following undisputed facts demonstrate the closeness of
    the relationship between Holloway and Allison, which requires
    "careful scrutiny" of the subject transactions:
    1.   They were married to each other for twenty years and had
    three children in common.
    2. They maintained "frequent" contacts with one another after
    their divorce.   Allison testified:
    Q. During the twenty years since you divorced
    Mr. Holloway, how often have you had contact with
    him?
    A.   Well, I don't really -- I mean often
    enough that it is difficult to say. Frequently.
    3.    Holloway wanted to protect Allison and keep her from
    becoming embroiled in the bitter controversy between him and the
    Browning Interests.3   At a hearing on February 27, 1989, Holloway
    testified that his third and current wife, Brenda, had borrowed
    money from Allison; however, Brenda did not sign the promissory
    notes.    Holloway did not mention that the loans from Allison were
    secured by any collateral. At that same hearing, when Holloway was
    questioned on cross-examination about Allison, he was evasive.
    Before reluctantly admitting that she was his first wife and the
    "mother of my children," he first stated that "[s]he is the widow
    3
    This court has likened that controversy to the feud between
    "the Hatfields and the McCoys." Browning v. Navarro, 
    887 F.2d 553
    ,
    554 (5th Cir. 1989).
    -9-
    of Mr. Jimmy Allison"; and when asked about their relationship,
    Holloway replied, "She has an old friend relationship."               Finally,
    he acknowledged that she was his former wife.              At the hearing on
    Allison's motion, Holloway stated:
    I was trying to keep my first wife [Allison] from
    being involved in the warfare between the Brownings
    and me. And that's the reason that they have not
    presented a claim prior to now, I think.
    4.        Allison   also     desired   to     "protect     Holloway;    she
    characterized     herself   and    Holloway   together     as   victims     of   a
    "siege," and testified that they tried to "protect each other."
    5.   Despite Allison's desire to avoid getting involved in the
    controversy between Holloway and the Browning Interests, the record
    indicates that she was keenly interested in that litigation and
    strongly supported Holloway's position.             In addition to helping
    finance Holloway while he pursued the Browning litigation, she
    admitted that she had sat in the back of the courtroom a few times
    during hearings.
    6.   The closeness of the relationship between Holloway and
    Allison   is   succinctly   illustrated       by   her   response   to    cross-
    examination as to why she made the loans to Holloway when she knew
    that he was insolvent:
    [I]t's very hard to describe to you what this ten
    years of litigation and the untrue allegations that
    have been made against Pat have done to my
    children. My daughter Marcie was paralyzed in an
    automobile accident on the night of the day that
    she read those allegations for the first time.
    There is nothing strange about two sane people
    coming together and cooperating in any way they can
    -10-
    in the aftermath of a tragedy like that.
    Contrary to Allison's characterization, we see no "paranoia" in the
    Browning Interests' supposition that Allison sought to assist
    Holloway in continuing his expensive litigation crusade against
    them because she blames them for the injury to her child.
    B
    Because of the closeness of the relationship between Allison
    and Holloway, we turn to give our careful scrutiny to the subject
    transactions.     The following undisputed facts lead us to conclude
    that   the   transactions    between   Allison   and   Holloway   were   not
    conducted at arm's length:
    1.    The loans were initially unsecured by any collateral.
    (Allison testified that she anticipated being repaid when Holloway
    prevailed, as she hoped he would, against the Browning Interests.)
    See In re Standard Stores, Inc., 
    124 B.R. 318
    , 325 (Bankr. C.D.
    Cal. 1991) (making a significant loan on an unsecured basis and
    without inquiring into the debtor's ability to repay the loan, is
    a significant factor in determining whether a transaction was
    conducted at arm's length).
    2. Allison knew that Holloway was insolvent, both at the time
    she made the loans and at the time she received and recorded the
    security agreement.         Although Allison was aware of Holloway's
    successive attempts to get his hands on the funds, as well as the
    competing claims to the funds made by others, including the United
    States, the Browning Interests, and Robbie Holloway, she did not
    -11-
    perfect the purported security interest or assert her claim until
    March   1989,      after      the   United    States   sought   relief    from   the
    automatic stay.
    3.      The      loans    were     not   commercially   motivated;      Allison
    testified that her motivation for the loans stemmed from the damage
    that the lengthy litigation with the Browning Interests had caused
    to her children.         No prudent lender would have made such loans to
    an insolvent Chapter 7 debtor in Holloway's circumstances. We also
    note the unusual circumstance that although Allison testified that
    funds were advanced to Holloway either by check or wire transfer,
    she introduced no cancelled checks or other evidence that funds
    were actually advanced.
    4. Holloway, who had no apparent reason or standing to become
    involved   in      the     priority     dispute   between    Allison     and   other
    claimants,      did    not     remain    disinterested--instead,       the     record
    clearly reveals that he sided with Allison.               In his response to her
    motion to determine the status of her claim, he "acknowledge[d]
    that the security interest held by Allison is valid, perfected and
    entitled to priority to any other competing claims against the
    collateral."       Holloway also filed a motion to dismiss the cross-
    action of the Browning Interests against Allison and the fraudulent
    conveyance defenses of the United States to her claim.
    V
    Allison contends that she is not an insider even under an
    expansive interpretation of that term.                  She relies upon In re
    -12-
    Schuman, 
    81 B.R. 583
    (9th Cir. B.A.P. 1987), an action by the
    trustee to set aside as a preference the debtor's transfer of a
    community property residence to his ex-wife.    The court concluded
    that the ex-wife was not an insider, stating:
    Although it is true that the parties had been
    married for nineteen years, and the Debtor had
    expressed a desire that his children be well
    provided for, these facts do not indicate that Mrs.
    Schuman was able to exert sufficient influence over
    the Debtor to render her an insider. Rather, the
    facts that the Debtor was remarried at the time of
    the transfer and that his relationship with Mrs.
    Schuman was hostile, suggest that she was unable to
    exert control over the Debtor in his financial
    decisions. The negotiations between the Debtor and
    Mrs. Schuman were adversarial in nature. In fact,
    Mrs. Schuman had previously pursued the Debtor in
    court to get child support payments and both
    parties had retained counsel to represent their
    interests. Thus, it is clear that the Debtor was
    not volunteering payment on his child support
    obligation.     These factors suggest that the
    transaction was, indeed, arms-length. Accordingly,
    we conclude that the trial court correctly
    determined that Mrs. Schuman did not exert the
    necessary degree of control or influence to render
    her an 
    insider. 81 B.R. at 586
    .   Although Schuman is certainly illustrative, it is
    distinguishable in several important respects.   First, the record
    contains no evidence of any recent hostility, certainly none at the
    time of the transfer, between Allison and Holloway.         On the
    contrary, their relationship, as depicted by the record, was quite
    cordial from 1984 onward; a hostile ex-wife would hardly lend money
    to her ex-husband.   Second, the factors listed in part IV B above
    suggest that the transactions between Holloway and Allison were
    conducted at anything but arm's length.
    -13-
    Allison also urges us to examine the criteria utilized by the
    Texas Court of Appeals in Putman to make its determination that the
    wife's physician was an insider:
    A review of the evidence reveals that Putman had a
    close personal relationship with both Husband and
    Wife. Both families engaged in social activities
    together, such as hunting. Putman also maintained
    a business relationship with both Husband and Wife.
    Putman was Wife's personal physician and he
    delivered the two children of Husband and Wife. As
    noted earlier, Wife discussed the financial
    difficulties she and Husband were experiencing
    during her doctor's appointment with Putman. She
    also asked Putman to help her convince Husband to
    seek treatment for his alcoholism.      Putman and
    Husband entered into several business deals
    together. For example, they entered into a hunting
    lease together, they jointly purchased the property
    in question and discussed the possibility of
    growing hay on this property, and they discussed
    investing in a restaurant together. In light of
    his personal knowledge of the business, financial,
    and personal affairs between Husband and Wife, we
    conclude that Putman was an insider under UFTA with
    respect to the conveyance of the Kaufman County
    
    property. 805 S.W.2d at 18-19
    .      Allison contends that there was no evidence
    that she and Holloway have any type of "special relationship" or
    "close personal relationship," based upon the following factors:
    (1) she lived in Dallas and Holloway lived in Giddings, Texas; (2)
    all contacts between her and Holloway were made by telephone, with
    one exception consisting of a meeting in her attorney's office at
    which her attorney negotiated a loan transaction; (3) both parties
    have remarried twice since their divorce; (4) there is no evidence
    of any ongoing social relationship; (5) there is no evidence of any
    business   relationship    outside   of   the   loan   transactions;   (6)
    -14-
    Holloway, a lawyer, has never represented Allison; and (7) their
    relationship was hostile in the past, as evidenced by an appeal
    from a lengthy custody battle, Holloway v. Allison, 
    494 S.W.2d 612
    (Tex. Civ. App. -- Tyler 1973, no writ).
    We do not think that the facts that Holloway and Allison lived
    in different locations and negotiated nearly all of the loan
    transactions by telephone support Allison's contentions; instead,
    those facts are further evidence that tell us that the transactions
    were not commercially motivated and were not conducted at arm's
    length.     Surely, an arm's length, commercially motivated lender
    simply would not have made such undocumented loans to an insolvent
    and   without    security     under     these        informal      and   careless
    circumstances.
    The fact that both parties have remarried twice since their
    divorce only highlights the extraordinary nature of both their
    continued    relationship     and     the   generous        and    casual   loan
    transactions.     Although there is little evidence of a social
    relationship between Holloway and Allison, the record reveals the
    existence of a committed personal and even emotional relationship,
    as evidenced by Allison's characterization of herself and Holloway
    as joint victims of a "siege," which was largely his fight, and by
    the bond between them resulting from their daughter's tragic
    accident.
    Furthermore,   the    circumstances       of    the   loan    transactions
    constitute evidence of a business relationship, albeit an unusual
    -15-
    one for ex-spouses.         We agree that there is no evidence of an
    attorney-client relationship between Holloway and Allison, but she
    testified that Holloway prepared the collateral assignment and
    security and agreement, as well as other documents evidencing the
    loan transactions.
    Finally, it is irrelevant that Holloway and Allison might have
    been hostile toward one another at the time of their divorce and
    during the custody battle which ended in 1973, eleven years before
    the first loan was made. Any such hostility clearly had dissipated
    and certainly did not exist at the time Allison perfected her
    security interest.
    We agree that there is no evidence that Allison exerted direct
    control over Holloway's financial affairs; further, she is correct
    in her assertion the mere lending of money is not sufficient to
    impute insider status to a lender.            However, the closeness of the
    relationship    between     Allison     and   Holloway,    together     with    the
    unusual   circumstances      of   the    loan    transactions,        support    an
    inference that Allison was in a position to exert influence over
    Holloway, as evidenced by his support for her position in the
    priority dispute to which he was not a party.                        Although an
    examination of the amount of control a lender has over a debtor's
    day-to-day     activities    is   very    important       in   the    context    of
    commercial   loan   transactions,        such   an   analysis    is    much    less
    relevant in situations like the present one, involving loans made
    with no commercial motivation.
    -16-
    Allison repeatedly stresses that the transactions were "real
    loans of real money evidenced by real notes and a real security
    agreement."    We do not disagree; however, the transfer at issue
    under the UFTA is not the loans, but the granting of the security
    interest in the HECI Judgment.       Holloway's liability to Allison on
    the notes is not at issue.
    In conclusion, Allison's arguments that she is not an insider
    simply will not support such a conclusion against the overwhelming
    and undisputed evidence to the contrary.
    VI
    Courts that have considered the issue, albeit in somewhat
    different    contexts,    have   concluded   that   the   determination   of
    insider status is a question of fact.         E.g., Matter of Missionary
    Baptist Foundation of America, 
    712 F.2d 206
    , 210 (5th Cir. 1983);
    In re Friedman, 
    126 B.R. 63
    , 67 (9th Cir. B.A.P. 1991); In re
    Hydraulic Industrial Products Co., 
    101 B.R. 107
    , 109 (Bankr. E.D.
    Mo. 1989).    Cf. In re 
    Schuman, 81 B.R. at 586
    n.1 ("[W]here the
    underlying facts are undisputed, a trial court is free, on a motion
    for summary judgment, to determine whether the established facts
    satisfy the statutory standard.         In this sense, it would be more
    accurate to consider the insider determination as a mixed question
    of law and fact.")       Although it would appear to us that once the
    underlying    facts   are   resolved,     insider   status   ultimately   is
    question of law, we need not address that prickly problem.
    The bankruptcy court found that Allison's "only substantial
    -17-
    contact with [Holloway] was to provide him with funds to help
    defray living and legal expenses," and concluded that she was not
    an insider.4      However, because that finding was based upon an
    incorrect, narrow interpretation of the statute, it is not subject
    to the "clearly erroneous" standard of review.           See Bose Corp. v.
    Consumers Union of United States, Inc., 
    466 U.S. 485
    , 501 (1984)
    ("Rule 52(a) does not inhibit an appellate court's power to correct
    errors of law, including those that may infect a so-called mixed
    finding of law and fact, or a finding of fact that is predicated on
    a misunderstanding of the governing rule of law.").             Because the
    bankruptcy court made no findings applying the correct legal
    standards,   we    ordinarily   would     remand   the   case   for   a   new
    determination     of   Allison's   status     based      upon   the   proper
    interpretation of the law.      However, "it is settled that findings
    are not jurisdictional and the appellate court may decide the
    appeal without further findings if it feels that it is in a
    position to do so."     9 C. Wright & A. Miller, Federal Practice &
    Procedure, §2577 at 699-70 (1971).        We are in a position to do so
    in this case and on this record, where the underlying facts are
    undisputed, where there are no credibility resolutions to be made,
    and where no view of the record would permit a finding that Allison
    was not an insider.     See Tomlin v. Ceres Corp., 
    507 F.2d 642
    , 648
    4
    It appears to us that the fact that Allison was willing to
    support Holloway personally and to help finance his litigation with
    the Brownings demonstrates the closeness of their relationsip and,
    consequently, militates in favor of insider status.
    -18-
    (5th Cir. 1975) (where the only factual finding supportable by the
    record was that Ceres Ranches was not a party to an agreement, a
    remand was not necessary; "[s]uch a finding, if the trial judge had
    made it, would be clearly erroneous"); Smithkline Diagnostics v.
    Helena Laboratories Corp., 
    859 F.2d 878
    , 886 n.4 (Fed. Cir. 1988)
    (remand is unnecessary when "as a matter of law, the court could
    only make one finding of fact or decide the fact in only one way.
    Otherwise, protracted litigation and unnecessary delay and expense
    would occur.").5
    We believe that a remand for a new determination of Allison's
    status based upon the proper interpretation of the law would be
    only a hollow ritual.     The undisputed, established facts can only
    support one inescapable conclusion:        Allison was an insider at the
    time   of   the   transfer.   Any    other   finding   would   be   clearly
    erroneous.    Therefore, the transfer of the security interest from
    Holloway to Browning should have been set aside as a fraudulent
    conveyance pursuant to Tex. Bus. & Com. Code Ann. § 24.006(b).           We
    5
    See also Matter of Legel, Braswell Gov't Securities Corp.,
    
    648 F.2d 321
    , 327 n.8 (5th Cir. 1981) (remand for finding of fact
    on whether party acted in good faith unnecessary where "a complete
    and fair resolution of this issue may be made from the record on
    appeal and that . . . record as a whole reflects that there was no
    genuine issue of material fact regarding Irving Trust's good
    faith"); Adams v. Agnew, 
    860 F.2d 1093
    , 1097 (D.C. Cir. 1988)
    (remand for finding on question of whether party had reasonable
    time for performance of contract unnecessary because decision of
    appellate court "based on undisputed historic facts contained in
    the record"); Otto v. Variable Annuity Life Ins. Co., 
    814 F.2d 1127
    , 1138 & n.11 (7th Cir. 1986), cert. denied, 
    108 S. Ct. 2004
    (1988) (in the interest of judicial economy, remand is unnecessary
    where issues are clear and turn on undisputed facts in the record).
    -19-
    see no compelling reason to subject the parties and the courts to
    further delays and expense by remanding the case for application of
    the proper legal standard to the undisputed facts. Accordingly, we
    REVERSE the judgment of the district court, VACATE the judgment of
    the bankruptcy court, and REMAND the case to the district court for
    the entry of judgment against Allison and in favor of the Browning
    Interests in accordance with this opinion.
    REVERSED AND REMANDED.
    -20-