Metcalf

Appellants Donald and Janet Metcalf were the primary financial backers of a start-up company named Adbox, Inc. In 1998, the Metcalfs agreed to sell their interest in Adbox to Christer Wernerdal, but Wernerdal soon failed to make payments required by the sales agreements. Wernerdal brought a lawsuit against the Metcalfs and later took Adbox into bankruptcy. The bankruptcy trustee initiated a preference action to recover a $21,035.58 payment from Adbox to the Metcalfs, and the Metcalfs filed a counterclaim against the trustee. The Metcalfs argued that the counterclaim was against a proper “opposing party” and that the disputed funds they received were “earmarked” and therefore not part of the bankruptcy estate. The Metcalfs appeal the district court’s affirmance of the bankruptcy court’s dismissal of the counterclaim and its grant of summary judgment to the trustee in the preference action. We affirm.

FACTS AND PRIOR PROCEEDINGS

The Metcalfs and Wernerdal formed Ad-box in 1992. The Metcalfs agreed to pay the company’s expenses until it became self-sufficient, and Wernerdal agreed to run the business as a salaried employee. The Metcalfs and Wernerdal jointly operated the business…