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153 F.3d 902; Morrison v. Champion Credit Corp. (In re Barefoot), 952 F.2d 795 (4th Cir. 1991).
With the widespread use of the Internet and alternative payment systems in everyday commerce, the law will be forced to reevaluate what is ordinary in today's economy. Sufficient analogy may be made to wire transfers, but ultimately, a case by case subjective and objective analysis is necessary to determine what is "ordinary."
The reported case law indicates two primary factual bases giving rise to the wire transfers at issue. The first involves wire transfers sent to make good on a check returned for insufficient funds. The second factual scenario involves a fact pattern where the parties switched to wire transfers in or near the preference period. The conclusions based on the factual background vary as expected.
It is uniformly clear that a wire transfer sent to pay a check that bounced for insufficient funds will not be considered ordinary. In re Barefoot, 952 F.2d at 795. The Fourth Circuit in Barefoot found that dishonoring a check was a deviation from the ordinary course of business and therefore the subsequent wire transfer represented an uncustomary medium of payment. The concurring opinion indicated that even if the parties had a history of bouncing checks with subsequent wire transfers, it still would be an unusual action and thus not ordinary. Other cases addressing the issue concur that wire transfers made to remedy bounced checks will never be ordinary. See N.Y. City Shoes, Inc. v. GSS Constr. (In re N.Y. City Shoes, Inc.), No. 87-03426S, 1989 WL 108215 (Bankr. E.D. Pa. Sept. 18, 1989); Samar Fashions, Inc. v. Private Line, Inc. (In re Samar Fashions, Inc.), No. 88-105085, 1989 WL 150244 (Bankr. E.D. Pa. Dec. 11, 1989) aff'd, 116 B.R. 417 (E.D.Pa. 1990); Cullen v. TDK Electronics (In re Antinarelli Enters., Inc.), 76 B.R. 247 (Bankr. D. Mass. 1987).
Under the second scenario regarding the situation where the parties switched to wire transfers in or near the preference period, courts are split on whether such transfers constitute an ordinary transaction under § 547(c)(2). In Healthco, 132 F.3d at 104, the First Circuit analyzed a case involving a distributor of dental
