'New Value' is Fixed as of the Petition Date

The two most commonly asserted preference defenses are the "ordinary course" defense under 11 U.S.C. 547(c)(2) and the "new value" defense under 11 U.S.C. § 547(c)(4). Of the two, the new value defense has the advantage of being easily calculable and ascertainable. InFriedman’s Inc. v. Roth Staffing Companies , Delaware Bankruptcy Court Judge Brendan L. Shannon wrote an opinion holding that new value is calculated as of the petition date. He thereby rendered the calculation of new value more certain in cases where a creditor receives post-petition payments for goods or services that comprise new value.

Prior to the petition date, Roth Staffing Companies provided staffing services to Friedman’s Inc. The debtor paid Roth $81,997.57 during the preference period. After receiving these payments (and before the petition date), Roth provided the debtor with $100,660.88 of services that remained unpaid as of the petition date. From the perspective of a preference analysis, a wrinkle arose when the bankruptcy court approved a "wage motion," under which the debtors were authorized to pay pre-petition wages to employees and to Roth (presumably for subsequent payment to Roth’s staffers). Under the wage motion, Roth received $72,412.71.