ESA Environmental Specialists, Inc. v. The Hanover Ins. Co., No. 11-2150 (4th Cir. 2013)Annotate this Case
The Trustee in bankruptcy of ESA appealed from the affirmance by the district court of the award of summary judgment by the bankruptcy court to Hanover. The bankruptcy court concluded that ESA's transfer of $1.375 million to Hanover within 90 days of ESA's filing a petition for bankruptcy was not an avoidable preference under 11 U.S.C. 547(b). The court held that, although the bankruptcy court erred in finding that the earmarking defense applied in this case, the court found no error in its determination that Hanover was entitled to the new value defense under section 547(c) to the Trustee's claim of a preferential transfer. Therefore, the court affirmed the judgment of the bankruptcy court awarding summary judgment to Hanover.