In a recent decision in Giuliano v. Innovative Nationwide Builders (In re Ultimate Acquisition Partners), Bankr. No. 11-10245, Adv. No. 11-52633 (Bankr. D. Del. Jan. 31, 2014), U.S. Bankruptcy Judge Mary F. Walrath of the District of Delaware, in deciding a summary judgment motion filed by the defendant in this particular adversary proceeding, addressed several issues, including the issue of subsequent new value. In particular, Walrath addressed the issue of what date controls for purposes of a subsequent new value defense, as articulated in Section 547(c)(4) of the Bankruptcy Code, and whether it is the receipt date or clearing date of a check that controls for purposes of the Section 547(c)(4) subsequent new value defense.

In this case, the defendant was a construction company that performed various construction jobs for several national retail chains, including the debtors. One of the debtors entered into a lease Jan. 26, 2010. In connection with the lease for that property, the debtor was entitled to make tenant improvements to the property, for which the landlord agreed to reimburse the debtor up to the sum of $1.16 million. The lease further provided that the landlord would reimburse the debtor for the tenant improvements once a certificate of completion and lien releases were provided to the landlord. To the extent the landlord failed to reimburse the debtor within 30 days of receipt of the certificate of completion and lien releases, the debtor was entitled to deduct the improvement costs from its rent until it was fully reimbursed.

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