Zimmerman v. Continental Bank (In Re Foland & Co.)

OPINION

EMIL F. GOLDHABER, Chief Judge:

The predominant issue in this case is whether under 11 U.S.C. § 547(b) of the Bankruptcy Code (“the Code”) the trustee may avoid an alleged preferential transfer made by the debtor in satisfaction of an obligation guaranteed by an insider. For the reasons stated herein, we conclude that the trustee has not met his burden of proving the elements set forth in § 547(b)(5) and thus the transfer may not be avoided.

The facts of this case are as follows: 1 Several creditors filed an involuntary petition for relief under chapter 7 of the Code against the debtor,…