In re Stewart
United States Bankruptcy Court for the Western District of Arkansas
274 B.R. 503 (2002)
Gary Stewart (debtor) bought cattle from Barry County Livestock Auction (Barry) (creditor), paying by personal check the same day Barry delivered the cattle, but the check was later returned for insufficient funds; Stewart then gave Barry a cashier's check to cover the purchase price, and about six weeks later filed Chapter 13 bankruptcy. The bankruptcy trustee sought to avoid the cashier's check payment to Barry as a preferential transfer under §547(b).
Whether a cashier's check payment made to satisfy a debt arising from a previously dishonored personal check qualifies as a contemporaneous exchange for new value or an ordinary-course-of-business payment exempt from preference avoidance.