Rushton v. SMC Electrical Products

C.W. Mining Company was forced into bankruptcy after creditors filed a petition for involuntary bankruptcy on January 8, 2008. Several months before the petition was filed, C.W. Mining had entered into its first contract with SMC Electrical Products, Inc., an agreement to purchase equipment with a view toward greatly increasing coal production. One payment for the equipment was a $200,000 wire transfer from C.W. Mining on October 16, 2007. Because this transfer was less than 90 days before the petition was filed, the bankruptcy trustee sought to recoup the $200,000 for the bankruptcy estate by initiating an adversary proceeding to avoid the transfer under 11 U.S.C. 547(b). Granting SMC summary judgment, the bankruptcy court rejected the Trustee’s claim on the ground that the debt was incurred and the payment made in the ordinary course of business. The bankruptcy appellate panel affirmed. Finding no reversible error, the Tenth Circuit affirmed too. View "Rushton v. SMC Electrical Products" on Justia Law