In Re Stewart

Facts

P filed a chapter 13 bankruptcy case on April 11, 2000. Joyce Bradley Babin serves as Trustee for P's case. P had assets totaling $169,650.00 and liabilities totaling $316,785.12. Of the $316,785.12 in liabilities, P scheduled $240,565.48 as secured debts and $76,219.64 as unsecured debts. P's assets and liabilities at the time of filing are consistent with his assets and liabilities during the ninety-day period prior to the bankruptcy filing and reflect P's insolvency. This case is considered a no-asset case and no distribution would be anticipated for unsecured creditors. Based on the plan payment and term, unsecured creditors will not be paid in full and are anticipated to receive a minimal (approximately one to two percent), if any, distribution from P's plan. D operates a livestock auction and is listed as an unsecured creditor. P primarily purchased cattle from D. Pursuant to the terms of the invoices reflecting the purchases, P was required to pay for cattle purchased the same day of the purchases. Within 90 days of P's filing, P purchased cattle from D. This resulted in total payments of $46,749.55 by cashier's checks and are the subject of the Trustee's preference action. The first check for $17,580.70. was returned for insufficient funds on February 12, 2000. The second check for $29,168.85 was returned for insufficient funds on March 4, 2000. P purchased Cashier's Checks to make good to D. The payments made with Cashier's Check Nos. 83582 and 83692 were made while P was presumed insolvent and was insolvent and were made within 90 days immediately preceding the P's bankruptcy filing. The payments made enabled D to receive more than it would have received if this case had been a chapter 7 case. D received notice of P's bankruptcy filing on April 14, 2000. D went to P's residence. The Sheriff was called and appeared on the scene. P's mother, Janet Scott, paid $15,000 to D toward P's debt.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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