  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
term debt.
In one recent post-bapcpa case, the Bankruptcy Court for the Eastern District of North Carolina found that the revised section 547(c)(2)(b) authorized the defendant to raise ordinary course of business terms where the transfers at issue deviated from the established course of greenling between the party. However, the court held that ordinary course of business defense requires the bankruptcy court review the industry standards of both the debtor and the creditor and the court concluded that the bank's general statements that are frequently received payment of loans and several weeks before the loan matured were not sufficient to show that the payments met banking industry standards (a more objective test). The court therefore concluded that the payments made by the debtor was going out of business for the purpose of paying off its debt for which the debtor's principals were liable were not made in the ordinary course of business. See Hutson v. Branch Banking and Trust Co. (In re National Gas Distributors, LLC), 346 B.R. 394 (Bankr. E.D.N.C., 2006). Practitioners should review the National Gas Distributors case with some care as there were many issues relating to the insider/guarantors. In particular, those guarantors were "benefited" by virtue of the payoff of certain indebtedness owing to the bank. While not directly on point, the National Gas Distributors case seems to implicate some of the policy concerns articulated in DePrizio. Subsequent cases may not hew quite so closely to the approach taken by the Court in National Gas Distributors.
In Florence Tanners, Inc. v. Vidosh (In re Florence Tanners, Inc.), 184 B.R. 520 (Bankr. E.D. Mich. 1995), a debt to a former employee incurred under settlement agreement was not incurred in the ordinary course of business because debtor was in business of selling fur and leather goods and debt arose as a result of a settlement agreement in sex discrimination action. Court noted that payments made pursuant to an agreement settling a dispute between the parties may never be debt incurred in the ordinary course of business. In Huffman v. New Jersey Steel Corp. (In re Valley Steel Corp.), 182 B.R. 728 (Bankr. W.D.
