- 11 U.S.C.
Harder v. JPPCS Inc. (In re Graff)
Jul
08
2011
Ruling
Late payments by debtor construction business to suppliers and contractors were made in the ordinary course of business and not preferential.
Procedural posture
Trustee filed adversary actions against creditors seeking to avoid preferential transfers pursuant to 11 U.S.C.S. § 547. The creditors asserted an affirmative defense under 11 U.S.C.S. § 547(c)(2) for transfers made in the ordinary course of business.
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- 11 U.S.C.
Montoya v. Battaglia (In re Weber)
Jul
05
2011
Ruling
Payment of fire insurance proceeds to landlord who took debtor in after fire was preferential.
Procedural posture
Trustee filed this adversary action against defendant transferee seeking to avoid a preferential transfer under 11 U.S.C.S. § 547 of $8,000 paid by the debtor to the transferee on the eve of filing for bankruptcy. The trustee moved for summary judgment.
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- 11 U.S.C.
Western States Glass Corp. v. Barris (In re Bay Area Glass Inc.)
Jun
28
2011
Ruling
Judgment lien in excess of threshold amount properly held avoidable in its entirety.
Procedural posture
Appellant creditor obtained a judgment lien against a bankruptcy debtor's property which was admittedly avoidable as a preferential transfer, but the creditor asserted that only a portion of the lien amount was avoidable under 11 U.S.C.S. § 547(c)(9). The creditor appealed the order of the U.S. Bankruptcy Court for the Northern District of California which sustained appellee bankruptcy trustee's objection to the creditor's secured claim.
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- 11 U.S.C.
ContinentalAFA Liquidation Trust v. Human Res. Staffing (In re ContinentalAFA Dispensing Co.)
May
09
2011
Ruling
Payments to temporary staffing agency in ordinary course of business were not avoidable.
Procedural posture
Plaintiff liquidating trust brought an adversary proceeding against defendant, a temporary staffing agency, to avoid and recover preferential transfers in the amount of $103,856 (collectively "Transfers"). The Transfers consisted of payments made by debtors to the agency in the 90-day period proceeding debtors' bankruptcy filing ("Preference Period"). The trust moved for summary judgment. The agency cross-moved for summary judgment.
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- 11 U.S.C.
Burtch v. Connecticut Cmty. Bank (In re J. Silver Clothing Inc.)
Apr
29
2011
Ruling
Transfer of security interest to bank was contemporaneous exchange for loan and not avoidable.
Procedural posture
Plaintiff Chapter 7 trustee filed a complaint against defendant creditors, an individual and a bank, in which he sought, inter alia, to avoid and recover fraudulent and preferential transfers under 11 U.S.C.S. §§ 548, 547, and 550 and the disallowance of all claims under 11 U.S.C.S. § 502(d). The creditors moved for summary judgment. The trustee cross-moved for partial summary judgment.
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- 11 U.S.C.
Simon v. Gerdau MacSteel Inc. (In re American Camshaft Specialties Inc.)
Feb
09
2011
Ruling
Avoidance proceeding failed where facts showed payments were made in the ordinary course of debtor's business.
Procedural posture
Chapter 7 trustee filed this adversary proceeding under 11 U.S.C.S. § 547(b) to avoid preferential transfers alleged to have been made to defendant transferee. The transferee filed two motions for summary judgment based upon affirmative defenses pursuant to § 547(c)(2) (ordinary course of business defense), and § 547(c)(4) (subsequent new value defense) raised in its answer to the complaint.
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- 11 U.S.C.
Circuit City Stores Inc. v. Mitsubishi Digital Elecs. Am. Inc. (In re Circuit City Stores Inc.)
Dec
01
2010
Ruling
Creditor could not both claim an administrative expense for value of goods and utilize the value of the goods in a new value defense to a preference claim.
Procedural posture
Plaintiff, chapter 11 debtors and the former operators of retail electronics stores, moved for partial summary judgment as to their objection to claims of defendant creditor, one of its regular suppliers of electronic items. At issue was whether the creditor could both claim an administrative expense under 11 U.S.C.S. § 503(b)(9) and utilize the value of the same goods in a 11 U.S.C.S. § 547(c)(4) new value defense to a preference claim.
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- 11 U.S.C.
Jacobs v. Gramercy Jewelry Mfg. Corp. (In re M. Fabrikant & Sons Inc.)
Nov
04
2010
Ruling
Preference period payments made much later than debtor's usual practice were not made in ordinary course of business and were voidable.
Procedural posture
Plaintiff, a trustee of a shared assets trust, filed an adversary proceeding against defendant creditor under 11 U.S.C.S. § 547(b) to recover funds paid by the Chapter 11 debtors during the 90-day preference period. The trustee established a prima facie case under § 547(b). At issue was whether the transfers were incurred and made in the ordinary course of business or financial affairs of the debtors and the creditor under § 547(c)(2)(A).
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- 11 U.S.C.
Official Committee of Unsecured Creditors v. Dow Chem. Co. (In re Erie County Plastics Corp.)
Nov
03
2010
Ruling
Summary judgment denied in creditors' committee's avoidance proceeding due to issues of fact concerning ordinary course of business defense and presumption of insolvency.
Procedural posture
In a Chapter 11 case, plaintiff creditors' committee filed an action against defendant supplier to avoid and recover preferential and/or fraudulent transfers. Plaintiff filed a motion for summary judgment.
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- 11 U.S.C.
Burtch v. Detroit Forming Inc. (in re Archway Cookies)
Sep
01
2010
Ruling
Debtor's preference period payments to supplier were not avoidable pursuant to ordinary course of business exception.
Procedural posture
Plaintiff chapter 7 trustee brought this adversary action pursuant to 11 U.S.C.S. §§ 547 and 550 against defendant, a supplier of plastic trays to debtors, seeking to avoid and recover as preferential certain transfers made by the debtor to the supplier. The supplier filed a motion for summary judgment.
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