In re Belknap Inc‪.‬

The preference problem in this case involving three checks issued by the bankrupt debtor requires an interpretation of section 547(b) of the 1978 Bankruptcy Act. That section provides that "the trustee may avoid any transfer of an interest of the debtor in property" made on or within 90 days of the filing of the bankruptcy petition. 11 U.S.C. § 547(b) (1988) (emphasis added). The two main questions presented are: (1) Is a bankrupt debtors check to be treated as a cash transaction at the time of its delivery to the creditor so that a check delivered more than 90 days before bankruptcy does not constitute a voidable preference even though the check is honored within the 90-day preference period? (2) If the date of delivery, rather than the date the check is honored, is the crucial date for purposes of determining a "transfer," when does delivery occur -- on the date of mailing or on the date the creditor receives the check?