Velde v. Kirsch

In a bankruptcy appeal brought by the trustee, claiming that a check received by appellee from debtor in replacement of a dishonored check was a payment made within the ninety-day period prior to the filing of a bankruptcy and was thus a prohibited preference under the Bankruptcy Code section 547(b), a ruling against trustee is affirmed where the replacement check resulted in the release of appellee's bank's security interest in collateral, and thus it constituted a contemporaneous exchange for new value falling within an exception to the trustee's avoidance powers.

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