- Case Type:
- Case Status:
- NC-17-1186-BSTa (9th Circuit, Apr 06,2018) Published
- An ordinary check delivered to the creditor pre-petition, but honored post-petition, was transferred on the date of honor for purposes of § 549(a).
- Procedural context:
- The Chapter 7 trustee filed a complaint seeking to avoid a $10,000 payment as a post-petition transfer under § 549(a) and to recover the funds for the benefit of the estate under § 550(a)(1). The trustee argued that a transfer for purposes of § 549 occurs when the check clears the debtor’s bank account, not when it is delivered to a creditor. The defendant argued the relevant date was the date of delivery. The bankruptcy court held a hearing, after which it determined the transfer occurred on the date the check was honored by the debtor's bank. Because the check was transferred post-petition without authorization, it was avoidable under § 549(a) and recoverable by the estate. The bankruptcy court granted summary judgment in favor of the trustee. Defendant appealed.
- The debtor, via its CFO, issued a check for $10,000. Later that same day, the debtor filed chapter 7 bankruptcy. The check cleared the debtor's bank account four days after the petition date.
- Brand, Spraker, and Taylor
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