MEMORANDUM OF DECISION
• This is an appeal from a bankruptcy court decision allowing Louis Fryman, Trustee for Debtor Corporation, to avoid two transfers by Debtor to Century Factors, a factor for two of Debtor’s suppliers. Century Factors contends: that the bankruptcy court erroneously considered pension liability as a debt in determining Debtor’s solvency; that there was no evidence supporting a finding of insolvency; that the Trustee’s expert did not correctly value Debtor’s assets; and that the Trustee failed to prove all of the elements of a § 547 preference action. The Trustee has filed a cross appeal seeking reversal of the bankruptcy court’s refusal to award interest on the recovered preferential transfers. Based on the following discussion, I will affirm the bankruptcy court’s decision in its entirety.
FACTS
This preference action was commenced on September 28, 1982, by the Trustee for Debtor’s estate to set aside two transfers by Debtor. A hearing was set for March 30, 1983. Prior to the hearing, the Trustee filed a motion to employ an expert. Taking the Trustee’s motion under advisement, Judge King proceeded to hear evidence on whether the Debtor was insolvent at the time of the transfers.
After a three year hiatus, the bankruptcy court resumed testimony on August 21, 1986 1 . At the second hearing, Judge King was no longer sitting and the testimony was heard by Judge Emil F. Goldhaber. At the hearing, the Trustee presented its two experts, Harris Devor, a certified public accountant (CPA), and Henry N. Port-ner, an attorney with expertise in pension law. Century Factors called another expert, Lawrence D. Bass, an attorney and CPA.
During the cross examination of Mr. Bass, the court suggested continuing the case to a later date. At a subsequent conference, presided over by Judge Scholl, the court ordered the Trustee to file a motion for Summary Judgment
2
by November 7, 1986, and for Century Factors to respond by November 7, 1986. Neither party objected nor sought relief from the court’s order. In an opinion dated December 23, 1986,
DISCUSSION
A. “Ripeness” for Decision
As a threshold matter, I must decide whether this case is “ripe” for judgment. Trustee asserts that on August 21, 1988, during the cross examination of Mr. Bass, the court suggested continuing the hearing to another date. Although the Trustee had completed questioning Mr. Bass about pension liability, cross examination remained as to other matters. In order to avoid bringing Mr. Bass back from New York for another day of questioning, the parties agreed, according to the Trustee, to have the court resolve whether the Debtor was insolvent at the time of the transfers and whether the Debtor had a defense under § 547(c)(3). If these two issues were decided in favor of the Trustee, it would prevail and there would be no need for further testimony. Century Factors however, asserts that the parties could not agree on what issues were appropriate for judgment and that he notified Judge Scholl that the hearing had not been completed and that judgment was premature.
In making their arguments both the Trustee and Century Factors rely on discussions held off the record. In making my decision, I must rely solely on the record before me. Gratuitous statement by either side, unsupported by the record, cannot be considered. While I agree that it would be unfair to make a decision before either side had completed its case, I find that based on the record before me the parties agreed that the resolution of certain issues was appropriate.
The record reveals that on September 5, 1986, Judge Scholl ordered both parties to submit findings of fact and conclusions of law. In addition, on October 29, 1986, after “a conference with counsel for [both parties]” Judge Scholl ordered both sides to submit a motion for “Summary Judgement, relating to all outstanding issues” and, as noted above, neither party objected nor sought relief from the October 29, 1986 order.
In its motion filed pursuant to the October 29, 1986 order,' Century Factors did not argue that the case was not ripe for judgment. In fact, Century Factors stated that the “parties and the Court have agreed that certain issues are ripe for determination and accordingly the Court entered an order on October 29, 1986.” The first time Century Factors argued that an agreement was not reached was in its motion for reconsideration of Judge Scholl’s December 23, 1986 decision which was denied on February 4, 1987. Therefore, based on the record before me, I find that the parties agreed to have the court decide certain issues in order to avoid the need for further testimony. Accordingly, the case is “ripe” for judgement.
B. Insolvency
1. Debtor’s Pension Liability
Century Factors argues that the bankruptcy court erred by concluding that the Debtor’s pension liability was a debt for the purposes of determining Debtor’s insolvency. Testimony at the hearings revealed that the Debtor’s withdrawal liability 3 was $1,007,000 when the Chapter 11 petition was filed on December 24, 1982. The Trustee’s expert also testified that that figure “would approximate the amount of [the Debtor’s withdrawal liability] two or three months before” the date of the filing, Trial Transcript (“T.R.”) August 21, 1986, at 19, and that as a result of the pension liability, the Debtor was insolvent on the date of the transfers.
Century Factors agreed that if the amount of withdrawal liability were included in the Debtor’s liabilities the Debtor *337 would have been insolvent on the date of the transfers. Century Factors expert, however, testified that such liability should not be included as a debt. The bankruptcy court, refusing to decide the issue based on an independent analysis of the Code, ERISA, and MEPPAA, ruled that based on the evidence adduced at trial the Debtor’s pension liability should have been included on its balance sheet and, as a result, the Debtor was insolvent on the transfer dates. Although I will affirm the bankruptcy court’s decision, I do so by doing, in part, what the bankruptcy court did not do — by making an independent analysis of the Code, ERISA, and MEPPAA.
The substance of Century Factors’ argument is that withdrawal liability does not arise under the ERISA until the employer withdraws from the plan. Any time before actual withdrawal, Century Factors argues, the employer’s liability is “at best, an unfixed, contingent liability [which is] neither due nor owing, [and is] not a liability which should be used in determining the insolvency of the debtor.”
After reviewing the relevant statutes and ease law, I find that Century Factors’ argument is unconvincing. Under the Code, “Insolvent” is defined as a “financial condition such that the sum of such entity’s debts is greater than all of such entity’s property at fair valuation.” 11 U.S.C. § 101(29)(A) (1982 Supp. II). “Debt” is defined as liability on a claim. Id. at § 101(11). A “Claim” is defined as:
(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or
(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured;
Id.
§ 101(4). The existence of a right to payment is determined by the law governing the relationship between the parties.
See In re Altair Airlines,
The legislative history, policies and goals of ERISA and MEPPAA have been sufficiently outlined in previous cases and need not be repeated here.
Pension Benefit Guaranty Corp. v. R.A. Gray & Co.,
Although Century Factors is correct in asserting that withdrawal liability does not arise until an employer withdraws from a plan, this does not prove that the Debtor did not owe a debt to the pension fund on the transfer dates which approximated the amount of its subsequent withdrawal liability. ERISA requires that employee pension plans should provide vested benefits to employees after a designated terms of service.
Amalgamated Ins. Fund v. William B. Kessler, Inc.,
Upon withdrawal from a pension plan, an employer does not escape his liability to the plan. Instead, the employer is required to “pay a fixed and certain debt to the pension plan.”
Gray,
Based on the above analysis, I find that withdrawal liability under the MEPPAA is a debt which should be considered in determining insolvency under the Code. It is clear from the case law analyzing withdrawal liability in a bankruptcy context that the relevant definitions of “debt” and “claim” are satisfied.
See
11 U.S.C. §§ 101(11), (4)(A);
In Re Pulaski Highway Express, Inc.,
The case of
In re Pulaski Highway Express, Inc.,
I am aware of the holding in
In Re Computerized,
In ruling that the claim was not discharged, the court stated that since the debtor neither withdrew from the fund nor rejected the contract, under which the pension liability arose, during the Chapter 11 proceeding, the fund did not have a provable claim during the reorganization.
Id.
at 349. The court concluded that withdrawal liability was “triggered” when Debtor ter
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minated its participation in the Fund, and merely because “the calculation of withdrawal liability includes pre-petition and pre-confirmation factors does not mean that such liability should be regarded as having accrued either during a pre-petition or a pre-confirmation period.”
Id.
(citing
In Re Kessler,
Although neither
Pulaski
nor
Computerized
addressed the issue of whether withdrawal liability should be considered to be a debt for § 547 purposes, I find that the
Pulaski
is more persuasive in the context of this case. The
Computerized
court did not have the advantage, and thus did not discuss, the more recent judicial interpretation of withdrawal liability.
Pulaski,
Although there may be some discussion among accounting professionals relating to how pension liability should be reflected on an entity’s financial statements and balance sheets, see Lorensen & Rosenfield, Vested Benefits — A Company’s Only Pension Liability, JourmAcct. October 1983, at 65, my decision is consistent with the testimony presented in the bankruptcy court. In addition, my opinion reflects the growing concern evident in the business world with the implications of pension liability. See, e.g., F. Williams, Unfunded Vested Liability Casts Pall Over Pan Am Buy-out, Pens. & Inv. Age, at 2 (March 9, 1987) (unfunded vested liability cited as major factor in preventing Pan-Am buyout); Danger of Asset —Liability Studies, Pens. & Inv. Age, at 10 (July 13, 1987) (discussing new concern over pension investment due to changing accounting practices).
It is true, of course, that the ongoing unfunded vested liability of an employer, i.e., withdrawal liability, may fluctuate depending on various factors affecting the plan, this does not mean that that liability cannot be calculated and counted as a liability of the debtor. The record in this case contains expert testimony that the debtor’s withdrawal liability of $1,007,000 on December 24, 1982, approximated its withdrawal liability on the transfer dates, and that by including that liability on the debt- or’s financial statements, the debtor was insolvent on the transfer dates. Although including withdrawal liability as a debt may increase the power of the trustee under § 547, this decision is mandated by the law and record in this case. 6
*340 Therefore, I will affirm the bankruptcy court’s decision to include withdrawal liability as a debt for the purposes of determining the debtor’s insolvency under § 547(b) of the Code.
C. Evidentiary Issues
1. Laventhol and Horwath Report and Expert Testimony
The bankruptcy court based its finding of insolvency on both the financial statements prepared by the Trustee’s experts and, to a greater extent, the Trustee’s experts’ testimony that the withdrawal liability of $1,007,000 on December 24, 1982, approximated the Debtor’s withdrawal liability on the transfer dates. Since the financial report was not allowed into evidence Century Factors argues that the bankruptcy court was incorrect in relying on the report and any testimony relating to the contents of that report. Century Factors contends that when this evidence is excluded, there is no support for a finding of insolvency.
I find Century Factors’ argument unpersuasive. Although the bankruptcy court was In error to base its finding of insolvency on the report which was excluded from the record, there is still evidence in the record to support the court’s finding. The Trustee’s experts, Mr. Devor and Mr. Port-ner, testified to the contents of the report, how the Debtor’s financial data in the report was prepared, what conclusions were made in the report, and, to some extent, their opinions with respect to the report’s contents and conclusions. Without objection to his competence, Mr. Devor explained the report’s itemization of the Debt- or’s assets and liabilities and the manner in which he evaluated them. In addition, De-vor identified the Debtor’s pension liability, the extent of that liability, and why it was included in the report.
Mr. Portner, the second expert to testify for the Trustee, explained the nature of pension liability, including withdrawal liability, and explained why it should be considered a liability of the Debtor. In light of this testimony, I find that there was support in the record for the bankruptcy court’s finding of insolvency and that such a finding was not clearly erroneous.
Century Factors argues that since the report was not allowed into evidence, the expert testimony concerning the contents of the report, its preparation, and any opinions relating thereto should have been excluded. Central to this argument is the Century Factor’s belief that the report was not admitted into evidence because it was not prepared in accordance with generally accepted accounting principles. This argument, however, is contrary to both the record and the law. The colloquy between the bankruptcy judge and counsel for the Trustee reveals that the court refused to admit the report because the Trustee’s expert had already testified to the contents of the report; therefore, the report was cumulative and unnecessary. N.T. August 21, 1986, at 56. Accordingly, any testimony relating to the contents and preparation of the report is clearly admissible.
In addition, any opinions expressed by the Trustee’s expert are also clearly admissible. An expert may testify to an opinion based on information which is not admissible into evidence provided the information is of the type which is reasonably relied upon by experts in that particular field in forming inferences or opinions upon the subject. Fed.R.Evid. 703;
American Bearing Co. v. Litton Indus. Inc.,
2. Going Concern Value
Century Factors also argues that since Mr. Devor admitted on cross-examination that the Debtor’s property was not valued as a going concern in the Laventhol and Horwath report, the wrong standard was utilized in valuing the Debtor’s property. Under the Code, a party seeking to avoid a preference must establish the “fair valuation of the Debtor’s assets.”
See
11 U.S.C. § 101(26). Normally, “fair value” is the “going concern” value or fair market price.
In Re Bellanca Aircraft Corp.,
In this case the bankruptcy court did not make a specific finding as to whether the Debtor deserved to be valued as a going concern. The court, however, did say that it considered the Trustee’s experts’ testimony more reliable than that of the Century Factors’ experts and part of the Trustee’s experts’ testimony was that the Debtor did not deserve to be valued as a going concern. 8 Thus, by relying on the Trustee’s expert testimony, the court implicitly adopted the view that the Debtor was not entitled to be valued as a going concern.
I find that the evidence in this case supports a finding that the Debtor was, at best, in a very unstable financial condition with a dubious future at the time of the transfers. Debtor’s receivables from its subsidiary and affiliate had to be written down by $417,000 due to the high improbability of collection. Debtor’s inventory also had to be written down by $249,000 and its physical assets were reduced by $57,000. In addition, Debtor’s liabilities had to be increased by $120,000, exclusive of any increase due to the inclusion of Debtor’s pension liability. I find that this evidence supports the Trustee’s expert’s opinion that the Debtor did not deserve to be treated as a going concern. To do so would be to misrepresent the Debtor’s financial position at the time of the transfers.
D. Prejudgment Interest
On cross appeal, the Trustee contests the bankruptcy court’s denial of prejudgment interest on the preference amount. The bankruptcy court denied prejudgment interest because Century Factor’s claim, although unsuccessful, “was hardly frivolous and because it was not responsible for the delay in the proceeding.”
There is no specific provision in the Code or Bankruptcy Rules which entitles a successful Trustee in a preference action to interest.
9
Instead the bankruptcy court
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must rely on its equitable powers to make such an award.
In Re Independent Clearing House Co.,
The purpose of awarding prejudgment interest is to compensate the Debtor’s estate for the inability to use the property during the time it was in the hands of the transferee,
Foreman Industries, Inc.,
Accordingly, I will affirm the bankruptcy court’s decision in its entirety. 10
Notes
. At the hearing on March 30, 1983, the parties submitted a stipulation regarding the dates of transfer. After the hearing, on July 20, 1983, the parties executed a stipulation narrowing the issues in the case. The Trustee moved for a directed verdict. On July 27, 1983, Century Factors filed a motion to be relieved from the stipulation, claiming that the Trustee had agreed to, but failed to make, certain changes in the stipulation before submitting it to the court. Argument was heard on these motions, on September 13, 1983, by Judge William A. King, Jr. On January 14, 1986, the bankruptcy court denied the Trustee’s motion for directed verdict and granted Century Factors’ motion for relief from the stipulation.
On January 27, 1986, the court directed the parties to continue settlement negotiations and ordered trial briefs to be submitted by February 19, 1986. A second motion for directed verdict, filed by the Trustee on February 20, 1986, was denied on March 31, 1986. On April. 10, 1986, the court granted the Trustee’s previous motion for a continuance and ordered a second hearing which, after several continuances, was held on August 21, 1986.
. Although the court asked for motions for "Summary Judgement”, the Trustee filed a Motion for “Judgement”. The court later stated that it considered the Trustee’s Motion for Judgement” appropriate.
. Withdrawal liability is an employer’s long term debt to a multiemployer pension plan for any unfunded vested benefits attributed to its employees once the employer either completely or partially withdraws from a pension plan. 29 U.S.C. § 1381. If any employer fails to pay its withdrawal liability, the Pension Benefit Guarantee Corporation (PBGC), a corporation created under ERISA, 29 U.S.C. § 1302, will satisfy that employer’s obligation to the fund and lodge a claim against the delinquent employer. 29 U.S.C. § 1368.
. It is possible for plan participants to extend the time periods by changing actuarial assumptions, extending actuarial periods, or seeking a waiver of the minimum funding standard. See Novikoff & Polebaum, supra, at 379-90. Interestingly, these methods of seeking relief from the minimum funding standard, especially the waiver method, have been analogized to a loan which must be paid in subsequent years. Id. at 379.
. In
Kessler,
the union sought to have the Debt- or’s withdrawal liability under the MEPPAA treated as an administrative expense under the Code.
Kessler,
. I recognize that, as a result of my decision, bankruptcy courts may be called upon to make a complex and technical determination of withdrawal liability. This task, however, is not beyond the capabilities of the bankruptcy courts.
Cf. In Re T.D.M.A., Inc.,
. Although there is testimony in the record to suggest that the report prepared by Laventhol and Horwath was not prepared in accordance with accounting principles, a further review of this testimony reveals that any deviation from *341 these principles was so slight that they would not effect the admissibility of the report. Moreover, these deviations were fully explained by Mr. Devor.
. Mr. Devor stated that although the Debtor was operating at the time of the transfers, it was not operating very well and, in his opinion, it did not deserve "treatment accounting-wise as a normal going concern.” Tr., August 21, 1986. at 38-39.
. The Code section frequently cited as giving authority to the bankruptcy court to award interest in a preference action is 11 U.S.C. § 550(a). In pertinent part this section provides:
[e]xcept as otherwise provided in this section, to the extent that a transfer is avoided under section 544, 545, 547, 548, 549, or 724(a)' of this title, the trustee may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from—
*342 (1) the initial transferee of such transfer or the entity for whose benefit such transfer was made; or
(2) any immediate or mediate transferee of such initial transferee.
11 U.S.C. § 550(a).
Courts generally rely on the reference to "value,” an undefined term in the Code, as giving the authority to award interest.
See In Re H.P. King, Inc.,
. There is also some dispute as to whether the fifth element of a preference action under § 547 has been met. Under this section, the Trustee must prove that the alleged preference allows the creditor to receive more than he would receive if the case were a case under Chapter 7 of the Code, the transfer had not been made and the creditor received payment of such debt as provided under the Code. See 11 U.S.C. § 547(b)(5). I find that in its motion for judgment in the lower court, Century Factors admitted that this element of the preference action was satisfied. See Defendant's Answer to Trustee's Motion for Judgment, at 1. Having done so, Century Factors cannot now assert a contrary position on appeal.