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Post-Bankruptcy Transfers Governed By Date Of Honor Rule

Post-Bankruptcy Transfers Governed By Date Of Honor Rule

The Ninth Circuit Bankruptcy Appellate Panel joined the Sixth Circuit Court of Appeals in holding that a post-bankruptcy transfer occurs on the date of honor for purposes of Section 549 of the Bankruptcy Code and not the date of delivery.  See Lewis v. Kaelin (In re Cresta Tech. Corp.), 2018 Bankr. LEXIS 1057 (B.A.P. 9th Cir. Apr. 6, 2018).  In 1992, the Supreme Court ruled in Barnhill v. Johnson that the date of honor rule, and not the date of delivery rule, governed when a transfer occurred for purposes of Section 547(b).  However, Section 547(b) deals with pre-petition transfers while Section 549 deals with post-petition transfers.  The only Circuit Court to address the issue of timing of a post-petition transfer was the Sixth Circuit in Guinn v. Oakwood Props. (In re Oakwood Mkts.), 203 F.3d 406 (6th Cir. 2000).  The Ninth Circuit Bankruptcy Appellate Panel overruled pre-Barnhill case law and now joins the Sixth Circuit and in holding that the date of honor rule is the relevant date for determining when a transfer occurred for purposes of Section 549.

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