The Debtor filed a complaint seeking to avoid the transfer of his interest in real property as a preferential and fraudulent transfer against the defendant, who purchased a tax sale certificate relating to the subject property.  The state court presiding over the tax sale proceeding had already issued an order foreclosing the Debtor’s right of redemption.  The Court was faced with two questions.  First, in a Maryland tax sale proceeding, does the transfer of a debtor’s interest in property occur, for purposes of Sections 547 and 548 of the Bankruptcy Code, when a tax sale certificate is purchased or when the state court enters an order foreclosing the debtor’s right of redemption?  Second, does the United States Supreme Court’s decision in BFP v. Resolution Tr. Corp., 511 U.S. 531 (1994), which held that the price paid at a foreclosure sale conducted in accordance with state law conclusively determines the value of the property, apply in a Maryland tax sale proceeding?

The Court determined that, for purposes of Sections 547 and 548 of the Bankruptcy Code, the transfer of the Debtor’s interest in the real property occurred when the state court foreclosed the Debtor’s right to redeem the property.  The Court further held that BFP, which involved a mortgage foreclosure, does not apply to causes of action brought under Sections 547 and 548 when the transfer occurs in a tax sale proceeding.  The Court granted summary judgment in the Debtor’s favor on Counts I and II of the complaint, thereby avoiding the transfer of the property pursuant to the state court redemption order under Sections 547(b) and 550.