Stoebner v. San Diego Gas & Electric Co. (In re LGI Energy Solutions, Inc.)
- Citation:
- Stoebner v. San Diego Gas & Electric Co. (In re LGI Energy Solutions, Inc.), Case No. 12-6043 (BAP 8th Cir. November 14, 2012)
- Tag(s):
-
- Ruling:
- Where the debtor acted as a payment intermediary between a utility and a customer and the contract between the debtor and customer required the debtor to remit funds to the utility, the contract created a trust obligation in favor of the utility. Consquently, for purposes of section 547, the utility was a creditor of the debtor because the creditor (1) had unsecured claims for breach of trust, and (2) was an intended beneficiary. Further, for purposes of calculating subsequent new value, the issue was not the subsequent services provided by the utility to the customer, but the subsequent payments from the customer to the debtor.
- Procedural context:
- Appeal from bankruptcy ruling that certain transfers were avoidable preferential transfers.
- Facts:
- The debtor acted as a payment intermediary between utilities and customers. The utilities provided invoices to the debtor, which then provided a report to the customer. The customer then paid the amount due to the debtor, which then paid the utility from the debtor's account. During the preference period, the debtor made various payments to the utilities from an unrestricted account. At a certain point during the preference period, the debtor stopped remitting payments to the utilities, but the customer continued paying the debtor. The debtor sued to recover certain of the payments as preferences. As the debtor and utilities were not parties to any contract, the utilities argued that they were not creditors of the debtor. On appeal, the BAP held that the utilities were creditors because the contract between the debtor and customers created a trust in favor of the utilities, and the utilities were beneficiares of the trust, so the utilities held an unsecured claim against the debtor in the event of a dissipation of the trust assets. The BAP also reversed the bankruptcy court's calculation of new value. Citing section 547(c)(4), which references new value provided by "such creditor," the bankruptcy court held that held that for purposes of calculating new value, the issue was the subsequent services provided by the utility. The BAP held that, construing the relationship as a whole, subsequent new value should include all subsequent payments from the customer, not just the payments for subsequent services.
- Judge(s):
- FEDERMAN, VENTERS and SALADINO
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