Garner v. Knoll, Inc.

The Trustee filed suit against Knoll, seeking to avoid transfers from Tusa Office, the debtor, to Knoll, its creditor as preferences under section 547 of the Bankruptcy Code, 11 U.S.C. 547(b). The court concluded that, because the Trustee did not satisfy the source aspect of the El Paso Refinery analysis, testing under the hypothetical Chapter 7 liquidation analysis is unnecessary. The court held that the Trustee failed to establish the requirement of section 547(b)(5) because the source aspect of the El Paso Refinery analysis demonstrates that the transfer from Tusa Office to Knoll was made from the proceeds of Knoll’s own collateral. Further, the exception to avoidance under section 547(c)(5) is inapplicable in this case. Accordingly, the court affirmed the judgment. View "Garner v. Knoll, Inc." on Justia Law