concurring in part and dissenting in part:

It does seem unfair that the Trustee seeks to “have his leased property and his rent payments, too.” The majority is confident that LCO and Lincoln never intended this result, and I agree. If Lincoln insisted that the Plan of Reorganization contain a provision protecting the $92,007.46 in rent payments from preference attack, LCO and its creditors probably would have agreed to that protection. Unfortunately, the parties did not provide for the rent payments, and this •litigation ensued. The majority is willing to construe the Bankruptcy Code to ameliorate the oversight, I am not.

Let me begin by noting my agreement with the majority’s rejection of the implied preference immunity agreement. What enormous mischief can result from permitting such agreements not to be brought to the table in a chapter 11 setting. Chapter 11 requires full disclosure so that all parties can make an informed decision on the reorganization plan. I think this unsupportable conclusion led the Bankruptcy Appellate Panel astray, influencing their entire analysis.

I disagree, however, with the majority’s reliance on § 365 of the Bankruptcy Code to resolve this dispute. The majority stresses that § 365 required LCO to cure any rent default or return Lincoln’s property depending on whether LCO assumed or rejected the leases. I think the majority overstates the relevance of § 365. LCO did not assume the leases pursuant to § 365. LCO assumed the leases pursuant to an approved plan of reorganization in which Lincoln agreed to reduce its claim rather than demand full cure under § 365. Assumption under § 365 would have required LCO to cure all defaults. LCO’s Plan of Reorganization did not. With all due respect to the majority, I think they let the inspissate fog obscure the actual Plan of Reorganization.

If rejection and assumption of the actual leases are so important, then the majority should explain the Plan of Reorganization’s inconsistent treatment of the three leases. Payments on LCO’s five-year lease with Lincoln (“Long Term'Lease”) accounted for over one-third of the challenged preference payments. On page five of the Plan of Reorganization, LCO rejected the Long Term Lease, but on page seven it listed the lease as assumed. If the Long Term Lease was rejected, then under the majority’s reading, Lincoln had no right to the rent payments— it only had a right to the return of its property.

In my opinion, the better approach is to follow the test outlined in § 547(b)(5): a liquidation analysis, as though “the case were *945 under chapter 7 of this title.” 'll U.S.C. § 547(b)(5) (1988). Chapter 7 it is, and chapter 7'it must be. As the majority concedes, courts have consistently held that the liquidation analysis should be conducted as of the date the petition in bankruptcy is filed. See Palmer Clay Prods. Co. v. Brown, 297 U.S. 227, 229 , 56 S.Ct. 450, 450 , 80 L.Ed. 655 (1986); Taunt v. Fidelity Bank (In re Royal Golf Prods. Corp.), 908 F.2d 91, 95 (6th Cir.1990); Neuger v. United States (In re Tenna Corp.), 801 F.2d 819, 822 (6th Cir.1986); McGoldrick v. Juice Farms, Inc. (In re Ludford Fruit Prods., Inc.), 99 B.R. 18, 24 (Bankr.C.D.Cal.1989); 4 Collier on Bankruptcy ¶ 547.08 at 547-42 (Lawrence P. King, ed., 15th ed. 1989).

On the date LCO filed its petition in bankruptcy, LCO’s Plan of Reorganization had not yet been filed or confirmed. On that date, LCO was not required to assume the leases. Under § 365(d)(1), if the trustee did not assume the leases within 60 days, the leases would be deemed rejected. Therefore, I agree with the bankruptcy court that a disputed issue of material fact remains: would a trustee in a hypothetical chapter 7 case assume or reject the leases on the petition date. See Walsh v. Lincoln Alvarado (In re LCO Enters.), 116 B.R. 188, 192 (Bankr.N.D.Cal.1990). This inquiry requires an analysis of the leases’ liquidation value on the filing date.

The majority protests that it refuses to ignore the “actual fact” that LCO agreed to assume the leases as. part of its Plan of Reorganization. Unfortunately, the majority’s fidelity to the “actual facts” ignores the command of the “actual statute”— § 547(b)(5). We must evaluate the alleged preference under the principles of chapter 7, while LCO decided to assume the lease in the context of chapter 11. LCO assumed the leases because they were critical to the continued operation of LCO’s business. Under chapter 7, a trustee will only assume a lease if she can cure the defaults and sell the lease to another party at a profit. Or, the trustee may assume a lease for a brief period of time to accomplish an orderly liquidation. See 11 U.S.C. §§ 704 , 724 (1988). The trustee’s goal is not the continued operation of the business, rather, it is the maximization of the estate’s liquidation value for the benefit of the creditors.

The Sixth Circuit’s decision in In re Tenna is a good example of how § 547(b)(5) should be applied. The majority briefly discusses the decision, but I think a fuller explanation will highlight the majority’s departure from the sound approach of In re Tenna. In that case, Tenna originally filed for chapter 11 bankruptcy. During the chapter 11 proceedings, Tenna borrowed additional money, and the bankruptcy court granted superpriority liens to the new lenders. Nevertheless, the reorganization was unsuccessful, and ten months later the case was converted to a chapter 7 proceeding. The chapter 7 trustee then filed a preference action against the Internal Revenue Service attacking a tax payment made within ninety days prior to the' filing of the chapter 11 petition. The critical issue was the date on which the § 547(b)(5) liquidation analysis should occur. If it was the date the original petition was filed, the tax payment was not a preference. If it was the date of the subsequent adversary hearing, the tax payment was a preference because of the intervening superpriority liens.

The Sixth Circuit held the chapter 7 analysis should occur as of the filing date of . the bankruptcy petition. Tenna, 801 F.2d at 822 . The court rejected the trustee’s argument that the “actual result” language of Palmer Clay required the inclusion of the postpetition debt incurred pursuant to a chapter 11 reorganization. Id. The court believed Congress’ concern for equality of distribution among creditors prevented the estate’s trustee from controlling the timing of the § 547(b)(5) test. Id. at 823.

The majority tries to limit In re Tenna by stating that it “did not establish an inflexible rule that no postpetition debts were to be considered.” The majority notes Tenna court’s acknowledgment that administrative expenses, which are necessarily incurred postpetition, should be included in the chapter 7 liquidation analysis. The majority, however, omits the context for that statement:

Id.

The majority’s opinion cannot be squared with In re Tenna. Under In re Tenna, the chapter 7 analysis must occur as of the filing date of the bankruptcy petition. As discussed previously, LCO was not yet bound to assume or reject the leases on that date. Moreover, the majority’s analysis of the “actual facts” looks like the “actual results” argument rejected by the In re Tenna court.

Instead, the majority finds the reasoning of the Eleventh Circuit in Seidle v. GATX Leasing Corp., 778 F.2d 659 (11th Cir.1985), persuasive. I do not. First, the Seidle court failed to discuss the case law requiring that the chapter 7 analysis occur as of the filing date of the bankruptcy petition. See Gosch v. Burns (In re Finn), 86 B.R. 902, 904 (Bankr.E.D.Mich.1988) (rejecting Seidle because § 547(b)(5) analysis “must be undertaken as of the moment of bankruptcy, and not some later, unspecified date”), aff'd 111 B.R. 123 (E.D.Mich.1989), rev’d on other grounds, 909 F.2d 903 (6th Cir.1990). Second, the Seidle court’s conclusion that the creditor did not improve its position because a postpetition agreement entitled the creditor to all the preferential payments does not apply to the present case. The debtor in Seidle promised to pay its creditor and cure all defaults pursuant to a court-approved stipulation, which the majority describes as equivalent to LCO’s assumption of the leases. However, LCO did not agree to cure all defaults as a condition of assuming the leases. In fact, the Plan of Reorganization provided that Lincoln waived any and all claims it held for overdue rents owed as of May 31, 1989.

I cannot join the majority’s opinion because I think it ignores the text of § 547(b)(5) in its attempt to reach an “equitable” result. If the statute requires a chapter 7 analysis to be conducted in a “vacuum,” excluding postpetition events, then into the vacuum we must go. If Lincoln and LCO wanted to avoid being sucked into the vacuum of § 547(b)(5), the Plan of Reorganization should have addressed the $92,007.46 in rent payments made by, LCO on the verge of bankruptcy.

The majority saves Lincoln, but muddles the statute. Instead of a bright-line rule evaluating potential preferences as of the filing date of the bankruptcy petition, the majority clouds the analysis with a new exception. Now, some postpetition events will be considered, and the liquidation analysis will be conducted on a later date which the court deems appropriate. Analyzing a hypothetical chapter 7 liquidation is hard enough without interjecting uncertainty as to the date of that analysis. I think a good vacuum might help clear away some of this fog.

Therefore, I dissent.