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a dishonored check. Dishonor changes the nature of the transaction from one intended for a contemporaneous exchange to a credit transaction. Dishonor is any refusal by a bank to pay upon presentment, regardless of the availability of funds.
In Anderson-Smith & Associates, Inc. v. Xyplex, Inc. (In re Anderson-Smith & Associates, Inc.); 188 B.R. 679 (Bankr. N.D. Ala. 1995), the transfer was "functionally" simultaneous despite nine-day delay in the extension of new credit and payment. In Mendelsohn v. Louis Frey Co. (In re Moran), 188 B.R. 492 (Bankr. E.D.N.Y. 1995), transfers were contemporaneous exchange for new value where creditor advanced new funds to debtor and received corresponding security interest in real property. In Newman v. Bank of New England Corp. (In re Bank of New England Corp.), 187 B.R. 405 (Bankr. D. Mass. 1995), a Chapter 7 debtor's transfer of employee's severance money into escrow account was substantially contemporaneous exchange for new value where employment contract was made on the date that funds were transferred to escrow.
In Clark v. Frank B. Hall & Co. (In re Sharoff Food Service, Inc.), 179 BR. 669, 676 (Bankr. D. Colo. 1995), a debtor's payment of insurance premium payments did not fall within subsection (c)(1) because they were made to bring a past due account current, and "'obtaining the right to do further business is not a contemporaneous exchange.'" In Janus v. Marco Crane & Rigging Co., In re JWJ Contracting Co., 287 B.R. 501 (B.A.P. 9th Cir. 2002), because Creditor had given an effective lien wavier in return for nsf check the delivery of a substitute cashiers check in return for a waiver was a transfer for an antecedent debt.
Prior to the October 18, 2005 effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), section 547(c)(2) excepted from avoidance any transfer to the extent that such transfer was: (A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee; (B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and (C) made according to ordinary business terms. 11 U.S.C. S 547(c)(2); In re Martin, 184 B.R. at 985. Following BAPCPA's effective date, the defendant need prove only that the debt was incurred in the ordinary course of business and that either the transfer was either subjectively ordinary (pre-BAPCPA section 547(c)(2)(B), post-BAPCPA section 547(c)(2)(A)) or objectively ordinary (pre-BAPCPA section (547)(c)(2)(C), post-BAPCPA section 547(c)(2)(B)). Schnittjer v. Pickens (In re Pickens), 2008 Bankr. LEXIS 6, at *9 (Bankr. D. Iowa Jan. 3, 2008); Hanrahan v. Grundy County Farm Serv. Agency (In re Walterman Implement, Inc.), 2007 Bankr.
