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In re OTA

In re OTA

United States Bankruptcy Appellate Panel of the Ninth Circuit

October 20, 1994, Argued and Submitted at San Francisco, California ; March 20, 1995, Filed

BAP No. NC-94-1599-OAsME

Opinion

 [*153] OPINION

OLLASON, Bankruptcy Judge.

This case concerns a preferential transfer of money in the form of a cashier's check. Following trial on stipulated facts, the bankruptcy court determined that a preferential transfer was made to appellant, and awarded judgment of $ 100,000 for appellee, the Chapter 7 trustee. WE AFFIRM.

FACTS AND PROCEDURE BELOW

Peter Lee and Ken Ota, a general partnership, ("Debtor"), filed a voluntary petition under Chapter 7 1 of the Bankruptcy Code on December 24, 1992.

 [**2]  The Hall-Mark Corporation ("Hall-Mark") supplied electronic parts to Debtor on a running account basis.

Between September 2 and September 21, 1992, Hall-Mark sold and delivered to Debtor electronic parts in the amount of $ 462,140.

On September 11, 1992, Debtor delivered check number 2117, (or "the partnership check"), drawn on a partnership account, in the amount of $ 100,000 to Hall-Mark as payment for goods received. Hall-Mark deposited the partnership check on September 14, 1992.

On September 23, 1992, Hall-Mark received check number 2117 from its bank, marked "Refer to Maker" on the signature block of the check. It was undisputed that the reason for the return of the check was that it lacked a dual signature.

More than 90 days before the bankruptcy petition was filed, Debtor acquired a replacement check for check number 2117 in the form of a cashier's check. Hall-Mark received the cashier's check in the amount of $ 100,000 on September 25, 1992. It was undisputed that September 25, 1992 was the ninetieth day before the bankruptcy filing.

Hall-Mark did not ship any more electronic parts to Debtor after September 23, 1992.

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179 B.R. 149 *; 1995 Bankr. LEXIS 418 **; 33 Collier Bankr. Cas. 2d (MB) 1360

In re PETER LEE and KEN OTA, a general partnership, Debtor. HALL-MARK ELECTRONICS CORPORATION, Appellant, v. CHARLES E. SIMS, Chapter 7 Trustee, Appellee.

Subsequent History:  [**1]  As Corrected April 21, 1995.

Prior History: Appeal from the United States Bankruptcy Court for the Northern District of California. Bk. No. 92-36153-STC, Adv. No. 93-3501-DM. Honorable Dennis Montali, Bankruptcy Judge, Presiding.

Disposition: AFFIRMED

CORE TERMS

cashier's check, bankruptcy court, dishonored, partnership, funds, check number, stipulated facts, replacement, new value, purchaser, purposes, contends, preferential transfer, customer's, electronic, contemporaneous, transferred, delivery, honored, drawer, payee, conclusions of law, signature, transfer of property, motion to dismiss, date of delivery, dishonored check, reasonable time, refuse to pay, stop payment

Bankruptcy Law, Judicial Review, Standards of Review, De Novo Standard of Review, Civil Procedure, Appeals, De Novo Review, Procedural Matters, General Overview, Clear Error Review, Clearly Erroneous Review, Criminal Law & Procedure, Clearly Erroneous Review, Bankruptcy, Estate Property, Contents of Estate, Avoidance, Prepetition Transfers, Preferential Transfers, Preferential Transfers, Elements, Antecedent Debt, Creditor Advantage, Debtor Insolvency, Preference Periods, Evidence, Inferences & Presumptions, Liquidations, Estate Property Distribution, Governments, Legislation, Interpretation, Commercial Law (UCC), Negotiable Instruments (Article 3), Indorsements, Negotiations & Transfers, Transfers, Time Limitations, Business & Corporate Compliance, Negotiable Instruments, Types of Parties, Drawees & Payors, Party Liabilities, Acceptance, Contracts Law, Discharge & Payment, Payments, Enforcement, Holders in Due Course, Bank Refusals to Pay, Definitions & General Provisions, Definitions, Checks, Bank Deposits & Collections (Article 4), Customer-Bank Relations, Stop Payment Orders, Funds Transfers (Article 4A), Issuance & Acceptance of Payment Orders, Duties & Liabilities of Parties, Place of Payment, Types of Commercial Transactions, Transfer of Negotiable Instruments, Negotiations, Deliveries, Trials, Judgment as Matter of Law, Adversary Proceedings, Judgments, Defenses, Dishonor & Presentment, Drawers & Makers, Presentment, Voidable Transfers, Exemptions From Avoidance, Subsequent New Value