George Miller, the Chapter 7 Trustee in the HomeBanc Mortgage bankruptcy, recently filed approximately 400 preference actions against various defendants under section 547 of the Bankruptcy Code. According to a Summons filed in one of the adversary actions, the first pre-trial conference is scheduled in the United States Bankruptcy Court for the District of Delaware on April 21, 2010. The HomeBanc bankruptcy, along with these adversary actions, are before the Honorable Kevin J. Carey, Chief Judge of the Delaware Bankruptcy Court.
HomeBanc originally filed petitions for relief on August 9, 2007, under chapter 11 of the Bankruptcy Code. On February 24, 2009, the cases were converted to chapter 7. Thereafter, the Office of the United States Trustee appointed George Miller as the Chapter 7 Trustee. According to documents filed in support of the Debtor’s bankruptcy petition, prior to filing for bankruptcy, HomeBanc originated, serviced and sold retail mortgage loans. HomeBanc also managed and invested in mortgage-backed securities.
Section 547(c)(1) of the Bankruptcy Code excludes from preference liability payments “made to be a contemporaneous exchange for new value given to the debtor.” Judge Carey recently issued a decision that addresses the extent to which a party may rely on the new value defense. A copy of Judge Carey’s decision is available here.