Northern Capital, Inc. v. Stockton National Bank (In Re Brooke Corp.)

MEMORANDUM OPINION AND ORDER GRANTING STOCKTON NATIONAL BANK’S MOTION FOR PARTIAL SUMMARY JUDGMENT

DALE L. SOMERS, Bankruptcy Judge.

When the Trustee seeks to avoid allegedly preferential transfers that partially satisfied debtor’s loan held by a lead bank subject to participation agreements and the lead bank transmitted the payments to the participants in accord with the participation agreements, is the lead bank the initial transferee under 11 U.S.C. § 550(a)(1) 1 ? This is a question of first impression presented by third-party defendant Stockton National Bank’s Motion for Partial Summary…