Acknowledging Momar’s right to a jury trial, the bankruptcy court referred the case to the United States District Court for the Eastern District of Arkansas. See Langenkamp v. Culp, 498 U.S. 42, 45 (1990) (“a creditor’s right to a jury trial on a bankruptcy trustee’s preference claim depends upon whether the creditor has submitted a claim against the estate,” quotation omitted). In the district court, the trustee conceded that one of the two transfers was not an avoidable preference. The parties filed cross-motions for summary judgment on Momar’s claim that the second transfer -- a payment of $31,470.50 made on April 26, 2009, to satisfy a Momar invoice dated March 31, 2009 -- fell within the ordinary course of business exception in § 547(c)(2). The trustee appeals the district court’s1 grant of summary judgment excepting that second transfer. We affirm.
“In general, an avoidable preference is a transfer of the debtor’s property, to or for the benefit of a creditor, on account of the debtor’s antecedent debt, made less than ninety days before bankruptcy while the debtor is insolvent, that enables the creditor to receive more than it would in a Chapter 7 liquidation. See § 547(b). If a transfer is avoidable under § 547(b), the creditor may escape preference liability by proving that it falls within one of the exceptions set forth in § 547(c).” In re Jones Truck Lines, Inc., 130 F.3d 323, 326 (8th Cir. 1997). This appeal concerns the often-litigated exception in § 547(c)(2) for transfers in the ordinary course of business.
Judge(s): James Loken
Jurisdiction: U.S. Court of Appeals, Eighth Circuit
Related Categories: Bankruptcy , Contracts , Employment , Maritime , Property , Wills / Trusts / Estates
|Circuit Court Judge(s)|
|Trial Court Judge(s)|