In AFA Investment v. Trade Source (In re AFA Investment), 538 B.R. 237 (Bankr. D.Del. 2015), the U.S. Bankruptcy Court for the District of Delaware addressed a summary judgment motion filed by the debtor. In this case, the debtor filed a preference complaint against Trade Source Inc. seeking to avoid and recover a $25,000 payment made by the debtor to Trade Source on Feb. 23, 2012, which was within 90 days of the debtor’s filing for bankruptcy. In the summary judgment motion, the debtor alleged the transfer at issue was a preference and, as such, should be avoided under Section 547(b) of the Bankruptcy Code.
In response to the summary judgment motion, Trade Source asserted the summary judgment motion should be denied because: (1) the debtor failed to establish that the transfer was made on account of antecedent debt; (2) the debtor failed to meet its burden of proof with respect to the debtor’s insolvency during the preference period; and (3) the defendant did not receive more than it would have otherwise received in a hypothetical Chapter 7 liquidation.
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