(7th Cir. Sep. 22, 2017)
The Seventh Circuit affirms the bankruptcy court, holding that the defendant’s new value defense to the trustee’s preference claim was valid. The trustee argued that the defendant was compensated for the new value when the debtor transferred to an affiliate prepetition its contract and debt owed to the defendant. The court finds such transfer merely acted as an assignment of the debt and did not discharge the debt. Thus, the new value defense was applicable. Opinion below.
Attorneys for Trustee: Kilpatrick Townsend & Stockton LLP, Colin Bernardino, Todd C. Meyers, Michael D. Langford
Attorneys for Defendant: Stinson Leonard Street LLP, Mark S. Carder; Bingham Greenbaum Doll, LLP, Thomas C. Scherer
Author: Matt Lindblom