University of Toledo Law Review
bankruptcy, preference laws, Cartage decision
In 1990 the Sixth Circuit decided two bankrupcty preference cases, Ray v. City Bank & Trust Co. (In re C-L Cartage Co.) ("Cartage") and Gosch v. Burns (In re Finn) ("Finn"), that will have important consequences in the administration of bankruptcy proceedings and will also influence the way lenders and borrowers do business with each other in the future, whether or not a bankruptcy ever ensues. This article first describes briefly the mechanics of preference law and the application of it in Cartage and Finn. The article then focuses primarily on the Cartage decision, because the analytic approach taken by the court in Cartage has implications for other preference issues. Finally, the article suggests what lenders can do to lessen the impact of Cartage.
Thomas D. Buckley, Insider Guaranties: Their Effect on the Bankruptcy Preference "Reach Back" Period and Possible Use in Getting an "Ordinary Course" Exception Avoidance, 22 University of Toledo Law Review 247 (1991)