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Barash v. Public Finance Corp.

658 F.2d 504 (7th Cir. 1981)
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Barash v. Public Finance Corp.

217 Citing cases

  1. In re Iowa Premium Service Co., Inc.

    676 F.2d 1220 (8th Cir. 1982)   Cited 6 times

    However, case law holds that a debt is "incurred" on the date upon which the debtor first becomes legally bound to pay. See Barash v. Public Finance Corp., 658 F.2d 504 (7th Cir. 1981); In re McCormick, 5 B.R. 726 (Bkrtcy.N.D.Ohio 1980); In re Bowen, 3 B.R. 617 (Bkrtcy.E.D.Tenn. 1980).

  2. In re Schwinn Bicycle Co.

    200 B.R. 980 (Bankr. N.D. Ill. 1996)   Cited 29 times
    Holding that installment payments of insurance premiums were not preferential because they did not diminish the estate where the payments provided the debtor the value of continued insurance coverage

    All six elements must be established in order to avoid a transfer. Barash v. Public Fin. Corp., 658 F.2d 504, 507 (7th Cir. 1981). As earlier noted, Schwinn transferred corporate funds to TIFCO within ninety days of bankruptcy, while Schwinn was presumed insolvent, 11 U.S.C. § 547(f), on account of antecedent debts created by the March and July Finance Agreements.

  3. In re Schwinn Bicycle Co.

    182 B.R. 514 (Bankr. N.D. Ill. 1995)   Cited 8 times
    Stating that secured claim "usually 'preferred' because secured creditors generally receive 100% of the value of their collateral upon distribution in a Chapter 7 case."

    The trustee must establish all six elements in order to avoid a transfer. Barash v. Public Fin. Corp., 658 F.2d 504, 507 (7th Cir. 1981). As earlier noted, Schwinn transferred corporate funds to TIFCO within ninety days of bankruptcy, while Schwinn was presumed insolvent, 11 U.S.C. § 547(f), on account of antecedent debts created by the March and July Finance Agreements.

  4. In re Auto-Train Corp.

    49 B.R. 605 (Bankr. D.D.C. 1985)   Cited 39 times
    Comparing “a real liquidation in which the Court looks at the value of the secured claim on the date of bankruptcy, plus the transfer,” to “a hypothetical liquidation, in which the Court determines the value of the secured claim if the transfers had not occurred.”

    The trustee must establish all five elements in order to avoid a transfer. Barash v. Public Finance Corp., 658 F.2d 504, 507 (7th Cir. 1981). The appellants assert that the trustee has not established the fifth element, which requires the trustee to show that the creditor received more money than he would have received if the payments had not been made and he received reimbursement after liquidation.

  5. In re Property Leasing Management, Inc.

    46 B.R. 903 (Bankr. E.D. Tenn. 1985)   Cited 25 times

    Ken Gardner, 10 B.R. at 647. See Barash v. Public Finance Corp., 658 F.2d 504 (7th Cir. 1981); In re Bowen, 3 B.R. 617 (Bankr.E.D.Tenn. 1980).

  6. In re Iowa Premium Service Co., Inc.

    695 F.2d 1109 (8th Cir. 1982)   Cited 90 times
    Holding that interest obligations are "incurred" when they become due, rather than when the promissory note is signed

    Cases interpreting § 547(c)(2) hold that a debt is incurred on the date upon which the debtor first becomes legally bound to pay, a conclusion with which we agree. Barash v. Public Finance Corp., 658 F.2d 504, 512 (7th Cir. 1981); In re Ken Gardner Ford Sales, Inc., 10 B.R. 632, 647 (Bkrtcy.E.D.Tenn. 1981); In re McCormick, 5 B.R. 726, 731 (Bkrtcy.N.D.Ohio 1980).

  7. In re Western World Funding, Inc.

    54 B.R. 470 (Bankr. D. Nev. 1985)   Cited 54 times
    Holding that the purpose of an avoidance action is to discourage a creditor from “racing to the courthouse” in hopes that a financially troubled debtor might avoid a bankruptcy filing by securing the cooperation of his creditors and, perhaps more importantly, “to facilitate the primary bankruptcy policy of equality of distribution of the debtor's assets” (quoting H.R.Rep. No. 595, 95th Cong., 1st Sess. 177–78 (1977), reprinted in 1978 Code Cong. & Admin. News 5963, 6138)

    A debt is incurred when the debtor first becomes obligated to pay. See Nolden v. Van Dyke Seed Co. ( In re Gold Coast Seed Co.), 751 F.2d 1118, 1119 (9th Cir. 1985), citing In re Emerald Oil Co., 695 F.2d 833, 837 (5th Cir. 1983) and Barash v. Public Finance Corp., 658 F.2d 504, 511 (7th Cir. 1981). This is true even though the debt is at first unmatured or contingent. Property Leasing, supra; New York Credit Adjustment Bureau Inc. v. Just In-Materials Designs, Ltd. ( In re Vasu Fabrics, Inc.), 39 B.R. 513, 516-17 (Bankr.S.D.N.Y. 1984).

  8. CHG International, Inc. v. Barclays Bank (In re CHG International, Inc.)

    897 F.2d 1479 (9th Cir. 1990)   Cited 40 times
    In CHG Int'l we held that interest payments on long-term debt are not covered at all by the ordinary course of business exception.

    Section 547(c)(2) was intended to complement the contemporaneous exchange section. Barash v. Public Fin. Corp., 658 F.2d 504, 511 (7th Cir. 1981). As originally enacted in 1979, section 547(c)(2) required that the debtor's payment to the creditor be made within 45 days after the debt was incurred.

  9. In re Energy Co-op. Inc.

    832 F.2d 997 (7th Cir. 1987)   Cited 152 times
    Holding that "a one-time payment to settle a breach of contract claim" was "not part of any recurring, customary trade transactions"

    See, e.g., In re Gold Coast Seed Co., 751 F.2d 1118; In re Emerald Oil Co., 695 F.2d 833 (5th Cir. 1983); In re Iowa Premium Service Co., 695 F.2d 1109; Barash v. Public Finance Corp., 658 F.2d 504 (7th Cir. 1982). Thus, these cases do not apply here.

  10. In re Colonial Discount Corp.

    807 F.2d 594 (7th Cir. 1986)   Cited 42 times
    Undertaking long-term debt an ordinary part of real estate business

    McNeal testified at his deposition that he relied on the financial report when he agreed to act as surety on the original loan. Any reliance by McNeal is simply irrelevant. Section 547(b)(3) is concerned solely with an objective question: whether the debtor's liabilities exceeded its assets on the date of the transfer sought to be avoided. 11 U.S.C. § 101(29)(A) (defining insolvency); see Barash v. Public Finance Corp., 658 F.2d 504, 510 (7th Cir. 1981) (legislative history of § 547 supports view that preferential nature of transaction is determined by objective criteria). Finally, the trustee produced evidence of CDC's insolvency.