In re the Liquidation of the State Bank

Are the items here involved (checks and cashier’s checks drawn on or by the State Bank of Binghamton, here referred to as “ Binghamton Bank ”) entitled to preference under subdivision 2 of section 350-1 of the Negotiable Instruments Law? (All statutory references are to the Negotiable Instruments Law.) This depends on whether the items have been treated as “ dishonored ” under section 350-j. All these items were forwarded by the payees, directly or indirectly, to the Federal Reserve Bank of New York (here referred to as “ Federal Reserve ”) for collection. Federal Reserve was, therefore, “…