November 8, 2021, District of Delaware – The Court granted Defendant D&M Holdings US Inc.’s motion for summary judgment in part and denied in part. Defendant had filed a summary judgment against a complaint filed by Trustee George L. Miller for the estate of Digital Networks North America, Inc. The Trustee’s complaint sought to recover and avoid transfers, including payroll transfers, expense transfers, receivables worth over $500k allegedly made to or for Defendant’s benefit.
The Court held that the payroll transfers were immune from avoidance either entirely under the ordinary course of business exception of 11 USCS § 547(c)(2) or partially under the subsequent new value exception of § 547(c)(4). Next, the Court found that numerous genuine issues of material fact existed concerning the avoidance and recovery of the expense transfers. Accordingly, the Court ruled in favor of Defendant.
However, for receivable, the Court held that Defendant did not show that the Delaware statute of limitations barred the Chapter 7 Trustee from seeking the turnover of receivable. Additionally, the Court held that Defendant’s complete set-off defense also failed because the conflict between the Debtor’s schedule and Defendant’s ledger was sufficient to create a genuine issue as to whether Defendant had a claim against the Debtor eligible for set-off. Accordingly, the Court held for the Trustee on these two counts.
Miller v. D&M Holdings US Inc. (In re Dig. Networks N. Am., Inc.), No. 15-11535 (KBO), 2021 Bankr. LEXIS 3080 (Bankr. D. Del. Nov. 8, 2021)