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Dishonor is any refusal by a bank to pay upon presentment, regardless of the availability of funds.
b. Miscellaneous Cases.
In Anderson-Smith & Associates, Inc. v. Xyplex, Inc. (In re Anderson-Smith & Associates, Inc.); 188 B.R. 679 (Bankr. N.D. Ala. 1995), the transfer was "functionally" simultaneous despite nine-day delay in the extension of new credit and payment. In Mendelsohn v. Louis Frey Co. (In re Moran), 188 B.R. 492 (Bankr. E.D.N.Y. 1995), transfers were contemporaneous exchange for new value where creditor advanced new funds to debtor and received corresponding security interest in real property. In Newman v. Bank of New England Corp. (In re Bank of New England Corp.), 187 B.R. 405 (Bankr. D. Mass. 1995), a Chapter 7 debtor's transfer of employee's severance money into escrow account was substantially contemporaneous exchange for new value where employment contract was made on the date that funds were transferred to escrow.
In Clark v. Frank B. Hall & Co. (In re Sharoff Food Service, Inc.), 179 BR. 669, 676 (Bankr. D. Colo. 1995), a debtor's payment of insurance premium payments did not fall within subsection (c)(1) because they were made to bring a past due account current, and "'obtaining the right to do further business is not a contemporaneous exchange.'" In Janus v. Marco Crane & Rigging Co., In re JWJ Contracting Co., 287
B.R. 501 (B.A.P. 9th Cir. 2002), because Creditor had given an effective lien wavier in return for nsf check the delivery of a substitute cashiers check in return for a waiver was a transfer for an antecedent debt.
E. Section 547(c)(2) - Ordinary Course of Business Defense.
1. Overview.
Prior to the October 18, 2005 effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), section 547(c)(2) excepted from avoidance any transfer to the extent that such
