In Re C-L Cartage Co‪.‬

This appeal presents a question of statutory interpretation of first impression for our circuit: whether 11 U.S.C. § 550 (a)(1), read together with sections 547 (b)(1) and (b)(4)(B), allows a trustee in bankruptcy to recover avoidable payments from non-insiders made during the extended preference period when those payments benefited insider creditors or guarantors. The bankruptcy court held that, while the debtor's payments to City National Bank and Trust were voidable preferences under 11 U.S.C. § 547(b), payments to the bank outside of the ninety-day preference period were not recoverable by the trustee in bankruptcy. The district court affirmed on all grounds. For the reasons stated in part III, we conclude that section 550(a)(1) permits such a recovery.