Lauter v. Wells Fargo Bank, N.A. (In re Gas-Mart USA, Inc.)
United States Bankruptcy Appellate Panel for the Eighth Circuit
February 19, 2020, Submitted; March 19, 2020, Filed
SCHERMER, Bankruptcy Judge
Richard S. Lauter, as Trustee of the Gas-Mart USA, Inc. Creditor Trust (Trustee), appeals the bankruptcy court's decision applying the contemporaneous exchange for new value preference defense under Bankruptcy Code §547(c)(1) to except payments by Gas-Mart USA, Inc. (Debtor) to Wells Fargo Bank, National Association (Wells Fargo) from avoidance as preferences. We have jurisdiction over this appeal from the final judgment of the bankruptcy court. See 28 U.S.C. §158(b). For the reasons that follow, we affirm.
There are four issues we need to address; each concerns the use of the §547(c)(1) defense. The first is whether new value was provided by the release of Wells [*2] Fargo's junior liens where a senior lienholder voluntarily released its liens for less than full payment of its debt. Second, whether Wells Fargo provided new value to the Debtor when the Internal Revenue Service (IRS), a secured creditor senior to Wells Fargo, was paid from the proceeds of a sale of the Debtor's assets and voluntarily released its liens. Third, whether a $100,000 payment made by the Debtor to Wells Fargo one day before a sale closing was intended to be a contemporaneous exchange. Fourth, whether Wells Fargo's release of claims against Phillips 66 and KCRC resulted in new value to the Debtor intended by the parties to be a contemporaneous exchange. In each instance, we see no error in the bankruptcy court's application of §547(c)(1).
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2020 Bankr. LEXIS 715 *
In re: Gas-Mart USA, Inc. DebtorRichard S. Lauter, not individually but solely as Creditor Trustee of the Gas-Mart USA, Inc. Creditor Trust Plaintiff - Appellant v. Wells Fargo Bank, National Association Defendant - Appellee
Prior History: [*1] Appeal from United States Bankruptcy Court for the Western District of Missouri - Kansas City.
Lauter v. Wells Fargo Bank, N.A. (In re Gas-Mart United States, Inc.), 598 B.R. 274, 2019 Bankr. LEXIS 711 (Bankr. W.D. Mo., Mar. 7, 2019)
liens, new value, contemporaneous, bankruptcy court, parties, inventory, fuel, proceeds of sale, releases, senior, security interest, court's decision, full payment, believes, argues, sales
Bankruptcy Law, Judicial Review, Standards of Review, Clear Error Review, De Novo Standard of Review, Prepetition Transfers, Preferential Transfers, Elements, Avoidance, Exemptions From Avoidance, Contemporaneous Exchanges, Subsequent New Value