Justus

I. INTRODUCTION

In these consolidated appeals from orders of the Ninth Circuit Bankruptcy Appellate Panel (“BAP”), 2 we must decide whether the United States Bankruptcy Court for the Southern District of California erred in determining that certain payments made to two of the debtor’s suppliers were avoidable under 11 U.S.C. § 547 (b) as preferential transfers. The bankruptcy court ruled that the ordinary course of business exception, under 11 U.S.C. § 547 (c)(2), did not apply as a matter of law to debt restructuring agreements, and granted partial summary judgment on that basis. The BAP disagreed, holding that the issue of whether payments under a restructuring agreement are made in the ordinary course of business is a question of fact that depends on the parties’ dealings and industry practice. The BAP nevertheless affirmed the partial summary judgment rulings on the basis that the evidence of record failed to raise a triable issue. We hold that the evidence was sufficient to create genuine issues of material fact as to whether the challenged payments qualified under the ordinary course of business exception, and therefore reverse and remand for a trial on that issue. In all…