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below market value at the foreclosure sale , the state regulatory regime in which creditors can conduct forced sales on foreclosed property would be frustrated .” Id . at 1153 . Determining that “[ t ] he Court ’ s rationale also applies to tax sales ,” the Ninth Circuit noted that in the area of real estate , which has traditionally been state based , the “‘ federal courts should pay considerable deference to state law . . . .’” Id . ( citing In re Tracht Gut , LLC , 503 B . R . 804 , 816 ( 9th Cir . B . A . P . 2014 )). The Ninth Circuit also referenced its earlier decision in Bailan v . Bledsoe , 569 F . 3d 1106 ( 9th Cir . 2009 ), in which it extended BFP to a state court ’ s dissolution judgment “ following a regularly conducted contested proceeding ” which the Ninth Circuit found conclusively established “‘ reasonably equivalent value ’ for purposes of Section 548 .” Id . at 1112 . In that case , the Ninth Circuit found that the “ state ’ s traditional interest in the regulation of marriage and divorce is at least as powerful as its traditional interest in regulating sales of real property .” Id . at 1112 . Distinguishing decisions which did not extend BFP to tax sales , the Ninth Circuit found these decisions were decided “ because of identified deficiencies in the tax sale procedures of the states in question .” In re Tracht Gut , 836 F . 3d at 1154 .
In Hackler v . Arianna Holdings Co ., 938 F . 3d 473 ( 3d Cir . 2019 ), the Third Circuit then faced the question of the applicability of BFP to New Jersey tax sales under Section 547 . The tax sale transferee argued that the policy of BFP applied to protect properly conducted tax sales under state law even under the preference statute . The Third Circuit declined to so extend the reasoning of BFP to tax sales challenged as preferences under Section 547 both on textual and policy reasons . Finding that “ federalism concerns . . . cannot overcome the plain language of the Bankruptcy Code ,” the Third Circuit noted that “ reasonably equivalent value ,” the cornerstone of the issue in BFP , was not found in Section 547 . Id . at 475 . Further , because “ at New Jersey tax sales the public bids only on the rate of interest on the unpaid taxes ,” the Third Circuit found these procedures would not meet the concerns with procedures of the sale underlying the
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