Category Archives: Subsequent New Value (11 U.S.C. § 547(c)(4))

Defining Ordinary: Judge Walrath (Bankr. D. Del.) Surveys Ordinary Course of Business Methodologies in In re Powerwave Technologies

By Evan T. Miller, Esq.

Determining the proper bookends when establishing a Historical Period for an ordinary course of business defense (“OCOB”) can be highly contentious in preference litigation.  The same can be said for determining which methodology is most appropriate for analyzing preference period transfers and even when to apply a given defense. Continue reading

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

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

Revised on Remand: Judge Walrath Reduces Defendant’s New Value Defense and Awards the Trustee Prejudgment Interest in Remanded Proceeding

By Gregory J. Flasser, Esq.

On March 29, 2016, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware (the “Court”) issued an opinion reducing the new value defense of Prudential Real Estate and Relocation Services, Inc., and Prudential Relocation, Inc. (collectively, “Prudential”) and awarding the chapter 7 trustee (the “Trustee”) prejudgment interest in Prudential Real Estate v. Burtch (In re AE Liquidation, Inc.), Adv. Proc. No. 10-55543 (MFW), 2016 WL 1238848 (Bankr. D. Del. Mar. 29, 2016). Continue reading

Chief Judge Stark (D. Del.) Issues a Pair of Opinions Addressing New Value, Ordinary Course of Business, and Earmarking Defenses (Part II)

By Evan T. Miller, Esq.

“Payment Plan” Payments Not Necessarily Ordinary

The second of Chief Judge Stark’s two September opinions is Prudential Real Estate v. Burtch (In re AE Liquidation, Inc.), 2015 WL 5301553 (D. Del. Sept. 10, 2015). Continue reading

Chief Judge Stark (D. Del.) Issues a Pair of Opinions Addressing New Value, Ordinary Course of Business, and Earmarking Defenses (Part I)

By Evan T. Miller, Esq.

The U.S. District Court for the District Court recently issued two opinions addressing lower court appeals which turned on the statutory defenses provided for in 11 U.S.C. §§ 547(c)(2) and (4), in addition to the availability of the “earmarking doctrine”. Continue reading