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fall outside that broad range should be deemed extraordinary and therefore outside the scope of subsection C." In re Tolona Pizza Products Corp., 3 F.3d 1029, 1033 (7th Cir. 1993).
Courts have concluded that Tolona Pizza '"requires the creditor to present some evidence of the practices of its competitors in order to establish the "ordinary business terms" in the industry.'" In re Midway Airlines, Inc., 180 B.R. at 1016. However, creditors "are not required to prove a particular uniform set of business terms, rather 'ordinary business terms' refers to the broad range of terms that encompasses the practices employed by those debtors and creditors, including terms that are ordinary for those under financial distress." Jan Weilert RV, Inc., 315 F.3d at 1198 (citing In re Kaypro, 218 F.3d at 1074; Tolona Pizza, 3 F.3d at 1033).
The Fourth Circuit developed a sliding scale test under § 547(c)(2)(C), adopting both Tolona Pizza and Molded Acoustical. Advo-System, Inc., 37 F.3d 1044; see also Gordon v. Siems Rental & Sales Co. (In re
M.P. Indus., Inc.), 215 F.3d 1320 (4th Cir. 2000). The Eleventh Circuit has likewise adopted this sliding scale test. See Grant v. Renda Broad. Corp. (In re Bee Furniture Co.), 250 B.R. 757 (Bankr. M.D. Fla. 2000). The Court held that the sliding scale approach should be used to determine whether the transaction between the debtor and transferee is consistent with industry norm. The Court stated:
A "sliding scale window" is thus placed around the industry norm. On one end of the spectrum, "[w]hen the relationship between the parties is of recent origin, or formed only after or shortly before the debtor sailed into financially troubled seas, the credit terms will have to endure a rigorous comparison to credit terms used generally in a relevant industry." In such a case, only those "departures from [the] relevant industry's norms which are not so flagrant as to be 'unusual' remain within subsection C's protection."
Advo-System, 37 F.3d at 1049 (citing Molded Acoustical, 18 F.3d at 225-26).
