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agreement to provide insurance coverage. The court rejected this argument stating that such payments were not for the benefit of the debtor because the debtor had no obligation under the terms of its collective bargaining agreement to supply benefits to the employees, but only to pay the fund.
New value must be given on an unsecured basis, or pursuant to an avoidable security interest, so that the estate will not be harmed by the preferential transfer. Mosier v. Ever-Fresh Food Co. (In re IRFM, Inc.), 52 F.3d 228 (9th Cir. 1995); Krafsur v. Scurlock Permiam Corp. (In re El Paso Refinery, L.P.), 178 B.R. 426 (Bankr. W.D. Tex. 1995).
Creditors who are undersecured may assert the new value defense if the new value is unsecured, regardless of whether the creditor is secured. El Paso, 178 B.R. at 443 (relying on Matter of Prescott, 805 F.2d 719 (7th Cir. 1986); Wolinsky v. Central Vermont Teachers Credit Union (In re Ford), 98 B.R. 669 (Bankr.
D. Vt. 1989)). In El Paso, the court also held that an indirect benefit received by a creditor will preclude a defense under subsection (c)(4).
In In re Micro Innovations Corp., 185 F.3d 329 (5th Cir. 1999), the creditor took a security interest in the materials that it was furnishing on credit and which were the basis of its new value defense. The creditor did not perfect the security interest. The Trustee asserted that the new value defense was not available because of the existence of the "security interest." The Court rejected this assertion and that the restriction applies on if is subject to a security interest that is valid and enforceable and perfected at the time of the bankruptcy.
6. New Value After Transfer.
New value must be given after the transfer occurs. See, e.g., Mosier v. Ever-Fresh Food Co. (In re IRFM,
