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H. Section 547(c)(5) Floating Liens.
creditors within the reach of that order. In In re Armstrong, 291 F.3d 517 (8th Cir. 2002), the court found that a gambling credit cannot constitute subsequent new value. In In re Holmes Envtl. Inc., 287 B.R. 363 (Bankr. E.D. Va. 2002), the court followed and interpreted the rule of Garland; accord In re Bridge Information Systems, Inc., 287 B.R. 258 (Bankr. E.D. Mo. 2002).
In In re Van Dyck/Columbia Printing, 289 B.R. 304 (D. Conn. 2003), the District Court reversed the order of the bankruptcy court which limited the new value credit only to advances that remained unpaid; rather the District Court followed the majority rule which interpreted section 547(c)(4) to carry forward the net balance of prior preferences in determining the effect of the subsequent new value on the total claimed. Court calculates the rule to dismiss the complaint. In re Information Packaging Inc., 297 B.R. 521 (Bankr. Tenn. 2003).
Hall-Mark Electronics Corp. v. Sims (In re Lee), 108 F.3d 239 (9th Cir. 1997). For purposes of the new value defense the payment by the debtor to a supplier by cashiers check did not relate back to the date of delivery of a personal check that the cashiers check was intended to replace because the personal check was subsequently dishonored. Where a check is dishonored and is subsequently replaced by a cashiers check, section 547(c)(40) does not apply. The court reasoned that where the creditor extends credit in reliance upon. receipt of payment, it is the parties' intention that the payment, made by check, will be honored within a reasonable time. If the check is dishonored, the intention to extend new value is no longer relevant.
For purposes of section 547(c) the date of a transfer by check is the date the check is delivered even though for purposes of section 547(b) the date of the transfer of a check is the date the check clears. In re Eleva, 235 B.R: 486 (B.A.P. 10th Cir. 1999). If however, the check is post dated, the date of delivery is the date the check clears. In re Micro Innovations Corp., 185 F.3d 329 (5th Cir. 1999). Date of the transfer is the date of delivery of the check and not the date it clears for purpose of the (c)(4) exception because it fulfills the statutory purpose. In re Contempri Homes, Inc., 269 B.R. 124 (Bankr. M.D. Pa. 2001).
The text of the defense requires that the transfer of new value must be from such creditor to whom the alleged preferential transfer must be made. In re Telsave Corp., 116 F. App'x 91 (9th Cir. 2004). The creditor transferee, not a third party, must be the one to extend new value to the debtor. Id.
H. Section 547(c)(5) Floating Liens.
