ABI Poll Respondents Divided Over Whether an Undersecured Creditor Can Claim New Value for Debtor Payments Received Within 90 Days of Filing

Contact: John Hartgen

            

703-739-0800

            

jhartgen@abiworld.org

ABIPOLL RESPONDENTS
DIVIDED OVER WHETHER AN UNDERSECURED CREDITOR CAN CLAIM “NEW
VALUE” FOR DEBTOR PAYMENTS RECEIVED WITHIN 90 DAYS OF
FILING

June 18, 2007, Alexandria,
Va. — Respondents to
w:st='on'>ABI’s latest online poll were divided
over whether an undersecured creditor who received payments from a
debtor within 90 days of the debtor’s filing can properly claim
that an agreement not to foreclose on collateral constitutes “new
value” under §547(c)(4). Half of the respondents agreed as 35

percent “agreed strongly,” while 15 percent “somewhat
agreed” that an undersecured creditor who received payments from a

debtor within 90 days of the debtor’s filing can properly claim
that their agreement not to foreclose on collateral constitutes
“new value” under the Bankruptcy Code.

Twenty-seven percent of
respondents, however, thought that an undersecured creditor who received

payments from a debtor within 90 days of the debtor’s filing could

properly claim that his agreement not to foreclose on collateral
constitutes “new value” under §547(c)(4).
 Fourteen percent “strongly disagreed” and 13 percent
“disagreed somewhat” that an undersecured creditor who
received payments from a debtor within 90 days of the debtor’s
bankruptcy filing could not properly claim that their agreement not to
foreclose on collateral constitutes “new value” under the
Bankruptcy Code. Twenty percent of the respondents did not know or had
no opinion on the issue.

The question comes from the
recent Seventh Circuit opinion in In re ABC-Naco No. 06-1719
(7^th Cir. Apr. 9, 2007) where the court held that the
payments were preferential and should be returned to the estate. (An
agreement by an undersecured creditor to forego his right to foreclose
on collateral is not new value.)

size='3'>ABI members and members of the public
were welcome to submit their response to the statement: “An
undersecured creditor who received payments from a debtor within 90 days

of the debtor’s bankruptcy filing cannot properly claim that his
agreement not to foreclose on collateral constitutes “new
value” under Section 547(c)(4). ” The latest
ABI Quick Poll was open to
the public for voting from June 1 – June 14.

size='3'>ABI’s weekly Quick Poll is posted

on ABI’s home page,
title='http://www.abiworld.org/'
href='http://www.abiworld.org/'>www.abiworld.org.
w:st='on'>ABI members and the public are invited to
respond to a question on a timely bankruptcy or insolvency issue. Visit

href='http://www.abiworld.net/quickpoll/'>
color='#0000ff'>http://www.abiworld.net/quickpoll/ to access
the results of previous ABI
Quick Polls.

###

size='3'>ABI is the largest multi-disciplinary,
nonpartisan organization dedicated to research and education on matters
related to insolvency. ABI
was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The
w:st='on'>ABI membership includes nearly 11,500
attorneys, accountants, bankers, judges, professors, lenders, turnaround

specialists and other bankruptcy professionals, providing a forum for
the exchange of ideas and information. For additional information on
ABI, visit www.abiworld.org.
For additional conference information, visit
title='http://www.abiworld.org/conferences.html'

href='http://www.abiworld.org/conferences.html'>http://www.abiworld.org/conferences.html.