In re: Mississippi Valley Livestock, Inc.

Federal 7th Circuit Court
Civil Court
Citation
Case Number: 
No. 13-1377
Decision Date: 
March 12, 2014
Federal District: 
N.D. Ill., W. Div.
Holding: 
Reversed and remanded
In bankruptcy proceeding in which trustee sought to recover preferential-transfer payments debtor made to one creditor, Dist. Ct. erred in finding that creditor was entitled to said payments, even though: (1) debtor was merely giving creditor cash payments for creditor’s property that was sold to third-party; and (2) debtor never had any equitable or legal interest in said property. While debtor had held creditor’s property in bailment so as to potentially allow creditor to receive said payments, Bankruptcy Ct. failed to make requisite findings as to any potential defenses available to bankruptcy estate. Moreover, remand was required because debtor had commingled proceeds of sale of creditor’s property with other cash in debtor’s account, such that creditor was only entitled to return of lowest intermediate balance of said account following deposit of proceeds into said account.