Author Archives: Bayard, P.A.

Can an Administrative Claim Be Used to Offset Preference Liability? Judge Carey (D. Del.) Addresses an Issue of First Impression in Quantum Foods

By Evan T. Miller, Esq.

Addressing an issue of first impression, Judge Kevin Carey (Bankr. D. Del.) ruled that a preference action defendant could use their allowed administrative expense claim as a setoff against any preferential transfer exposure. Continue reading

Are Invoice Terms Alone Sufficient to Establish Contemporaneous Exchange for New Value or Ordinary Course of Business Defenses? In Cousins Fish Market, Second Circuit Offers Guidance

By Evan T. Miller, Esq.

The United States Court of Appeals for the Second Circuit (the “Second Circuit”) recently affirmed the judgment of the United States District Court for the Northern District of New York (the “District Court”) in John Nagle Co. v. McCarthy (In re The Cousins Fish Market, Inc.), 2016 WL 3854277 (2d Cir. July 12, 2016), which in turn had affirmed a decision of the district’s bankruptcy court (together with the District Court, the “Lower Courts”), finding the Lower Courts properly ruled that the defendant (“Defendant”) had not established its affirmative section 547(c) defenses. Continue reading

Does a Recent Change of Ownership Impact a Preference Defendant’s Ordinary Course of Business Defense? Judge Davis (Bankr. W.D. Tex.) Provides an Answer in In re Sterry Industries, Inc.

By Evan T. Miller, Esq.

The United States Bankruptcy Court for the Western District of Texas (the “Court”) recently addressed an interesting question – can a preference defendant establish an ordinary course of business defense to a trustee’s suit even though a pre-preference period change in defendant’s ownership also changed the course of its business with the debtor? Continue reading

Seventh Circuit Reverses Bankruptcy and District Courts in Delineating the Ordinary Course of Business’s Baseline of Dealings Requirement  in In re Sparrer Sausage Co.

By Evan T. Miller, Esq.

The United States Court of Appeals for the Seventh Circuit (the “Seventh Circuit”) recently reversed a Bankruptcy Court ruling and District Court affirmation (both in the Northern District of Illinois, and collectively, the “Lower Courts”) that had given only partial credit to a preference defendant’s section 547(c)(2)(A) ordinary course of business defense. Continue reading

Third Circuit Addresses Issue of First Impression in Finding the Payee Irrelevant for Purposes of Applying Section 547(c)(9)’s Aggregate Value Threshold in In re Net Pay Solutions, Inc.

By Evan T. Miller, Esq.

The United States Court of Appeals for the Third Circuit recently addressed an issue of first impression – whether a Chapter 7 trustee (the “Trustee”) could avoid multiple small-dollar payments to the Internal Revenue Service (“IRS”) that the debtor (the “Debtor”) had made on behalf of multiple clients, on the basis that all of the payments were made to the same payee. Continue reading