404
Stevens, J., dissenting
should not be rejected unless Congress has unequivocally commanded a contrary result. In the Bankruptcy Code, Congress has done no such thing. On the contrary, the Code is entirely consistent with the normal practice.
The definition of the term "transfer" in § 101(54) is plainly broad enough to encompass the conditional transfer of the right to funds in the debtor's bank account that occurs when the debtor delivers a check to a creditor. Section 101(54) defines a "transfer" as "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property . . . ." 11 U. S. C. § 101(54) (1988 ed., Supp. II). A check 3 is
obviously a "mode" through which the debtor may "par[t] with property." 4
Of course, the fact that delivery of a check effects a "transfer" within the meaning of the Code does not answer the question whether the trustee may avoid the transfer by check in this case because § 547(b) only authorizes the trustee to avoid transfers made "on or within 90 days before the date of the filing of the [bankruptcy] petition." 11 U. S. C. § 547(b)(4)(A). That raises the question: When did the "transfer" occur? Section 547(e)(2) provides the answer. It states that for purposes of the preference avoidance section, § 547, a transfer is made:
3 A check is an order, signed by the maker, to the drawee bank to pay the sum stated upon demand. See Uniform Commercial Code § 3-104, 2 U. L. A. 224 (1991).
4 The fact that "[m]yriad events can intervene between delivery and presentment of the check that would result in the check being dishonored," ante, at 399, does not alter this conclusion because § 101(54) expansively defines the term "transfer" to include even conditional modes of parting with property. In my opinion, the delivery of a check effects such a conditional transfer because upon delivery, the transferee receives a conditional right to funds in the bank account of the maker—the condition being acceptance by the drawee bank.
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 NextLast modified: October 4, 2007