McKinstry v. B&H Contractors, LLC (In re GC London KY Inc.)

(Bankr. E.D. Ky. Oct. 11, 2017)

The bankruptcy court enters judgment in favor of the Chapter 11 trustee, holding the trustee is entitled to recover approximately $280,000 in post-petition transfers and recover $40,000 in prepetition payments. The debtors repaid a post-petition loan that was not approved by the bankruptcy court and which was not in the ordinary course. The prepetition payments were preferential and the new value defense and ordinary course defenses do not apply. Opinion below.

Judge: Schaaf

Attorney for Trustee: Fowler Bell PLLC, Matthew D. Ellison

Attorneys for Defendant: Giodano, Halleran & Cisela, P.C., Donald F. Campbell, Jr.; Bingham Greenebaum Doll, James R. Irving, April A. Wimberg

2017-10-11 – in re gc london ky

Author: Matt Lindblom

The Unsecured Creditors Committee of Sparrer Sausage Company, Inc. v. Jason’s Foods, Inc.

(7th Cir. June 10, 2016)

The Seventh Circuit reverses, holding the bankruptcy court applied too narrow of a baseline payment range to the creditor’s ordinary course defense in this preference action. While this court agreed that there were a few payments outside the ordinary course, the new value defense applied to completely offset those payments. Opinion below.

Judge: Sykes

Attorneys for Appellant: Nixon Peabody LLP, Richard Scott Alsterda, Theodore Eric Harman

Attorneys for Appellee: Clark Hill PLC, Pamela Joy Leichtling, Scott N. Schreiber

2016-06-10 – unsecured creditors committee v jasons foods

Author: Matt Lindblom

Knauer v. Krantz (In re Eastern Livestock Co., LLC)

(Bankr. S.D. Ind. Oct. 28, 2015)

The bankruptcy court grants the defendant’s motion for summary judgment in this preference action. The defendant had sold and delivered cattle to the debtor prepetition and received payment in the form of checks three days after delivery. The checks were then voided and replaced by a single wire transfer a few days later. All of this occurred within 90 days of the petition date. The court finds that the ordinary course defense does not apply based on lack of evidence of the terms of prior transactions between the parties. The court finds, however, that the contemporaneous exchange defense is applicable. The debtor and the defendant intended a contemporaneous exchange and such an exchange was actually accomplished (despite the voiding of the checks and replacement by wire transfer). Opinion below.

2015-10-28 – knauer v krantz

Author: Matt Lindblom