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The article examines Section 548 of the U.S. Bankruptcy Code which helps trustees avoid fraudulent asset transfers, highlighting the balance sheet test. It provides a background of the fraudulent transfer law which originated from the Statute of Elizabeth in 1571. It explores fraudulent transfers of assets as well as several insolvency tests. Other topics include liquidation value, return on assets, and discount rates.

The article offers a primer on discount rates, the second in a four-part series addressing the complex issues bankruptcy professionals encounter when dealing with fraudulent conveyance claims and other issues related to analyzing solvency. It discusses some of the fundamental rate determination with which litigators should be familiar with. The article also explains weighted average cost of capital, including its tax effect and elaborates on U.S. Treasury Yield curve and operating leases.