In re Bohlen Enterprises, Ltd.
Decision Date | 23 September 1987 |
Docket Number | No. C 87-2034,Bankruptcy No. 86-01665W.,C 87-2034 |
Citation | 91 BR 486 |
Parties | In re BOHLEN ENTERPRISES, LTD., d/b/a Central Office Equipment, Debtor. Thomas G. McCUSKEY, Substitute Trustee for Wesley B. Huisinga, Plaintiff/Appellant/Cross-Appeal Appellee, v. NATIONAL BANK OF WATERLOO, Defendant/Appellee/Cross-Appeal Appellant. |
Court | U.S. District Court — Northern District of Iowa |
George D. Keith, Waterloo, Iowa, for Nat. Bank of Waterloo.
Thomas G. McCuskey, Cedar Rapids, Iowa, trustee.
Michael Dunbar, Waterloo, Iowa, for debtor.
This matter is before the court on appellant Thomas G. McCuskey's (hereinafter "Trustee") appeal, filed March 23, 1987, and the cross-appeal of the National Bank of Waterloo (hereinafter "Bank"), filed March 30, 1987, from a decision of the bankruptcy court1 entered February 20, 1987, 78 B.R. 556 (Bkrtcy.N.D.Iowa). Both sides have filed briefs outlining their arguments.
The sole issue before the bankruptcy court was whether a payment by the debtor to the Bank in the amount of $191,777.27 constituted a preference which is avoidable by the trustee in bankruptcy under the provisions of Bankruptcy Code § 547(b). The bankruptcy court made the following findings of fact and conclusions of law and entered the following order.
Memorandum and order re: Trustee's claim of preference, filed February 20, 1987.
Bankruptcy Rule 8013 sets forth the standard used by this court when reviewing decisions of the bankruptcy court.
On appeal the district court or bankruptcy appellate panel may affirm, modify, or reverse a bankruptcy court\'s judgment, order, or decree or remand with instructions for further proceedings. Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of witnesses.
Conclusions of law are reviewed de novo.
This court has carefully reviewed the record and finds that the bankruptcy court's findings of fact are supported by the record and are not clearly erroneous. The next question is whether the bankruptcy court's conclusions of law are correct.
The Trustee contends that the bankruptcy court erred in holding that the Bank was entitled to retain $125,068.50 of the amount in dispute. The court found that, pursuant to the "earmark" doctrine, this amount did not constitute "property of the estate." The Bank, on the other hand, contends that the bankruptcy court erred in holding that $66,708.77 of the disputed amount constituted a preferential transfer.
This court finds that the bankruptcy court was correct in holding that the Bank was entitled to retain $125,068.50 as "earmarked" funds. In general, when a third part...
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