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court. The Lutz decision contains an interesting review and analysis of the method for determining the level of administrative expenses when the alleged preferential payment was made to the Internal Revenue Service.
The Tenth Circuit has held that a Chapter 7 debtor's prepetition payment to a materialman, that was made after creation of the state law statutory lien but prior to its perfection, was not preferential because the materialman was the holder of an unavoidable inchoate lien that could have been perfected if the materialman had not been paid and did not receive more than it would have in liquidation. Bryant v. JCOR Mech., Inc. (In re Electron Corp.), 336 B.R. 809 (B.A.P. 10th Cir. 2006).
Guttman v. Associates Commercial Corp. (In re Furley's Transport, Inc.), 272 B.R. 161 (Bankr. D. Md. 2001) aff'd, 306 B.R. 514 (D. Md. 2002), is a careful analysis of 547(b)(5) in the case of an undersecured creditor. In Philip Services Corp. v. Luntz (In re Philip Services, Inc.), (Delaware) 284 B.R. 541 (Bankr.
D. Del. 2002), aff'd, 303 B.R. 574 (D. Del. 2003), the Court concluded that once an executory contract is assumed, the trustee or debtor may not maintain a preference action to recover payments made prepetition pursuant to that contract.
The Court in Hall v. Ford Motor Credit Co. (In re JKJ Chevrolet, Inc.), 412 F.3d 545 (4th Cir. 2005), considered the correct analysis of commingled payments made by bankrupt car dealerships to its secured creditor pursuant to "floor plan" financing arrangements and stated that the lower courts were "incorrect in asserting that the 'tracing' principles that would have determined [Secured Creditor's] perfected security interest at the time of the preference payments are relevant to the trustees' claims [of preferential payments]." Id. at 549 (emphasis omitted).Succinctly stated, the holding found that "Section 547(b)(5) is not concerned with whether the preference payments can be traced to the proceeds of collateral; rather that section calls for a comparison of the amount of the preference payments to the amount the creditor would receive in a hypothetical Chapter 7 proceeding. And, more importantly, a secured creditor's perfected
