2007 NORTON BANKRUPTCY LAW SEMINAR MATERIALS
ADVANCED ISSUES IN AVOIDANCE
By Hon. William H. Brown, Dennis J. Connolly, David A. Lander, Timothy M. Lupinacci
Funding Group, Inc.), 220 B.R. 739 (B.A.P. 2d Cir. 1998).
Legal claims arise when the legal services are performed, not when the bill itself is presented to the client. U.S. Trustee v. First Jersey Sec., Inc. (In re First Jersey Sec., Inc.), 180 F.3d 504 (3d Cir. 1999). In Stewart v. Barry County Livestock Auction, Inc. (In re Stewart), 274 B.R. 503 (Bankr. W.D. Ark.), aff'd, 282 B.R. 871 (B.A.P. 8th Cir. 2002), the debt was antecedent where:
(1)
all buyers at livestock auction barn were required to pay for their purchases on the date of the sale;
(2)
debtor's cattle purchase debts were incurred on date of sale;
(3)
payment by cashiers check was made two weeks after the sale.
E. Insolvency Requirement.
1. Insolvent Defined.
11 U.S.C. § 101(32) states that "insolvent" means
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(A)
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with reference to an entity other than a partnership and a municipality, financial condition such that the sum of such entity's debts is greater than all of such entity's property, at a fair evaluation, exclusive of -
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(i)
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property transferred, concealed, or removed with intent to hinder, delay, or defraud such entity's creditors; and
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(ii)
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property that may be exempted from property of the estate under section 522 . . . ;
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(B)
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with reference to a partnership, financial condition such that the sum of such
