Travelers Property Casualty Company of America Seeks Summary Judgment Against Legendary Field Exhibitions Trustee’s Preference Claim Concerning Insurance Premiums
September 7, 2021, Western District of Texas – Defendant Travelers Property Casualty Company of America files a motion for summary judgment pursuant to Rule 7056 of the Federal Rules of Bankruptcy Procedure against Trustee Randy Osherow’s complaint to recover alleged preferential transfer from Travelers.
The Trustee seeks to recover payments totaling $586,218.00 as preferential transfers from Defendant under § 547, alleging that the payment was made during the 90 days before the commencement of the Debtor Legendary Field Exhibitions, LLC et al ‘s bankruptcy case. As alleged in Defendant’s motion filed with the Court, Debtor made the said transfer to Defendant to fund a deposit covering future insurance premiums that were not yet owed. Defendant’s assertion rest on the premise that the alleged transfer was not made “on account of antecedent debt,” as required to be an avoidable preference, thereby entitling summary judgment in favor of Travelers on the Trustee’s preference claim.
Alternatively, Travelers also asserts that Court should rule in its favor on three additional bases. First, Travelers argues that the transfer is exempt from avoidance under Section 547(c)(1) of the Bankruptcy Code as it was a contemporaneous exchange for new value (continuation of insurance coverage). Second, after the transfer, Travelers allegedly provided new value in the form of ongoing insurance coverage worth more than the transfer, shielding it from recovery under Section 547(c)(4) of the Bankruptcy Code. Thirdly, the Defendant argues that the transfer was the payment of a debt incurred by the Debtor in the ordinary course of business between the parties and according to ordinary business terms, and hence not avoidable under Section 547(c)(2)(B) of the Bankruptcy Code.