Bankruptcy Ct. did not err in denying Trustee’s motion to recapture $1.9 million in payments made to defendant-creditor that occurred within 90 days of debtor filing bankruptcy petition. While creditor conceded that instant payments potentially qualified as preferential payments under 11 USC section 547(b), Bankruptcy Ct. could properly find that creditor provided debtor with new values within preferential payment period in form of additional telecommunications services so as to qualify as affirmative defense under 11 USC section 547(c). Moreover, Bankruptcy Ct. could properly use per diem method to calculate new value transferred to debtor. Fact that debtor made debt assignment to third-party did not require different result, even though said debt assignment indirectly benefited creditor.
Federal 7th Circuit Court
Civil Court
Bankruptcy