In
re Hessco Industries, Inc.9th Cir. BAP 2003 ORDINARY
COURSE DEFENSE AGAINST PREFERENCE ACTION REQUIRES EVIDENCE
OF PREVAILING BUSINESS STANDARD
Court reverses the bankruptcy court's conclusion that the
ordinary course of business defense precluded judgment for
the Trustee on the preference cause of action because
appellees had failed to present evidence of prevailing
business standards as required under Sulmeyer v. Suzuki
(In re Grand Chevrolet, Inc.), 25 F.3d 728, 732 (9th Cir.
1994).
But the court recited with approval remarks from Ganis
Credit Corp. v. Anderson (In re Jan Weilert RV, Inc.), 315
F.3d 1192 (9th Cir. 2003), amended by 326 F.3d 1028 (9th
Cir. 2003): “[C]reditors are not required to prove a
particular uniform set of business terms, rather "ordinary
business terms" refers to the broad range of terms that
encompasses the practices employed by those debtors and
creditors, including terms that are ordinary for those
under financial distress. Only a transaction that is so
unusual or uncommon "as to render it an aberration in the
relevant industry," falls outside the broad range of terms
encompassed by the meaning of "ordinary business terms."
BATLAN v. TRANSAMERICA COMMERCIAL FIN. CORP. (09/13/01 - No.
99-35946) (9th Cir. Ct App) Under 11 USC
547(b)(5), a bankruptcy trustee must still prove that a
secured creditor received payments in excess of its secured
interest during the 90 days before the debtor filed a
petition, even if the creditor had a floating lien.
http://caselaw.lp.findlaw.com/data2/circs/9th/9935946p.pdf
GANIS CREDIT
CORP. v. ANDERSON (01/13/03 - No. 01-55455/56872) (9th
Cir Ct Apps) Under 11 U.S.C. section 547(c)(2)(C), a
court cannot limit "ordinary business terms" to the "average"
transactions in the industry, but must consider the broad
range of terms that encompasses the practices employed by
similarly situated debtors and creditors facing the same or
similar problems.
http://caselaw.lp.findlaw.com/data2/circs/9th/0155455p.pdf
FRANK v. MICHIGAN STATE
UNEMPLOYMENT AGENCY (06/06/01 - No. 00-1233) (6th Cir St App) Pre-petition liens on the
bankruptcy debtor's property do not reattach to post-petition
preference proceeds recovered by a bankruptcy trustee because
the proceeds are property of the estate to be distributed to
the debtor's creditors under the Bankruptcy Code.
MOREHEAD v. STATE FARM MUT.
AUTO. INS. CO. (05/03/01 - No. 99-6430) (6th Cir St App)
A wage garnishment is an avoidable transfer where the
garnishment is of wages earned during the 90-day preference
period in bankruptcy under 11 USC 547(b)(4)(A).
http://laws.lp.findlaw.com/6th/01a0143p.html
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