  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
abrogated by Reopell v. Massachusetts, 936 F.2d 12 (1st Cir. 1991) In re Lan Yik Foods Corp., 185 B.R. 103; Solow v. Ogletree, Deakins, Nash, Smoak & Stewart (In re Midway Airlines, Inc.), 180 B.R. 1009 (Bankr. N.D. Ill. 1995); In re Deltacorp, Inc., 179 B.R. 773; Krafsur v. Scurlock Permian Corp. (In re El Paso Refinery, L.P.), 178 B.R. 426 (Bankr. W.D. Tex. 1995); rev's 171 F.3d 249 (5th Cir. 1999); Kepler
v. Aetna Fin. Co. (In re Ausman Jewelers, Inc.), 177 B.R. 282 (Bankr. W.D. Wis. 1995); Cocolat, Inc. v. Fisher Dev., Inc. (In re Cocolat, Inc.), 176 B.R. 540 (Bankr. N.D. Cal. 1995). Under BAPCPA, the preference defendant who meets the requirement that the payment was made on a debt incurred in the ordinary course of business need only prove that the payment was ordinary as between the parties or ordinary in the industry.
Courts consider four primary factors to determine if payments are ordinary between the parties: (1) the length of time the parties were engaged in the transactions at issue; (2) whether the amount or form of tender differed from past practices; (3) whether the debtor or creditor engaged in any unusual collection or payment activity; and (4) whether the creditor took advantage of the debtor's deteriorating financial condition. These factors are considered by comparing pre-preference period transfers with preference period transfers. See, e.g., Bergner v. Bank One, Milwaukee, N.A. (In re P.A. Bergner & Co. Holding Co.), 187 B.R. 864 (Bankr. E.D. Wis. 1995) aff'd in part, rev'd in part, 140 F.3d 1111 (7th Cir. 1998); In re El Paso Refinery, L.P., 178 B.R. 426; In re Cocolat, Inc., 176 B.R. 540; see also In re Valley Steel Corp., 182 B.R. 728 (rejecting per se rule that finds that payments made outside invoice terms are not ordinary); In re Lan Yik Foods Corp., 185 B.R. 103 (same).
The subjective inquiry into ordinariness suggests some consistency with other business transactions between the parties, but even irregular transactions may be ordinary if they are consistent with the course of dealings between the parties. In re P.A. Bergner & Co. Holding Corp., 187 B.R. 964; In re Lan Yik Foods Corp., 185 B.R. 103. However, evidence of an unusual collection method used by creditors demonstrates the probability of a transfer or payment outside the ordinary course of business, Cent.
