United States Fourth Circuit

Summary judgment for defendant in challenge by Trustee to debtor's transfer of funds to defendant, who issued surety bonds relating to debtor's government contracts, is affirmed, as debtor's transfer of $1.375 million to defendant within 90 days of debtor's filing a petition for bankruptcy was not an avoidable preference under 11 U.S.C. 547(b), where the bankruptcy court: 1) erred in its determination that the earmarking defense applies in this case because the funds at issue were not used to pay an antecedent debt; but 2) properly held that defendant carried its burden to prove all the elements of the new value defense under section 547(c)(1) so as to bar the Trustee from avoiding the transfer.

Appellate Information

• Decided 03/01/2013
• Published 03/01/2013

Judges

• AGEE

Court

• United States Fourth Circuit

Counsel