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transfer caused. Miller v. Bodek & Rhodes, Inc. (In re Adelphia Automatic Sprinkler Co.), 184 B.R. 224
(E.D. Pa. 1995). Value is determined as of the date of the transfer. Cocolat, Inc. v. Fisher Dev., Inc. (In re Cocolat, Inc.), 176 B.R. 540 (Bankr. N.D. Cal. 1995). Where the payment at issue was made first by a check that failed to clear the bank and thereafter by a replacement cashiers check, the cashiers check not the bounced check establishes the relevant time point after which the new value must have been provided.
New value must be given to the estate, and not to a third party. Id., at 548. In Cocolat, a contractor who provided improvements to the debtor's leasehold property argued that when the debtor made a prepetition payment it released its mechanic's lien on the property. Yet, the court found that the leasehold did not have any value and, therefore, any release of the mechanic's lien benefited only the property owner, not the debtor's estate. The contractor, relying on Lang v. Heieck Supply (In re Anderson Plumbing Co.), 71 B.R. 19 (Bankr. E.D. Cal. 1986), stated that by releasing its lien, the estate was benefited because it eliminated any indemnification claim the owner would have had the estate. The court in Cocolat rejected Anderson Plumbing stating that such a release did not enlarge the estate from the point of unsecured creditors and, therefore, it was not new value.
A transfer of new value by a third party to the debtor may satisfy the "new value" requirement. Jones Truck Lines, Inc. v. Cent. States, Se. & Sw. Areas Pension Fund (In re Jones Truck Lines, Inc.), 130 F.3d 323 (8th Cir. 1997). To the extent that a creditor can demonstrate that its agreement to modify the terms of the debtor's obligation gave the debtor new money or money's worth in new credit, goods, services or property there is no reason to void the transfer. In Gray v. Chace (In re Boston Publishing Co.), 209 B.R. 157 (Bankr. D. Mass. 1997), although the substitution of debt for equity could be said to have augmented the Debtor's estate by reducing the debtor's liability it is necessary to quantify the actual amount of new value that subordination produced. Therefore the transferee hailed to satisfy its burden or proof.
