By: Jeffrey N. Schatzman
Schatzman & Schatzman, P.A.
Miami, Florida
In Kaye v. Blue Bell Creameries, Inc. (In re
BFW Liquidation, LLC),
2018
U.S. App. LEXIS 22504 * | __ F.3D __ | 2018 WL 3850101 (11th
Cir 2018), decided on August 14, 2018, the Eleventh Circuit Court of Appeals
made clear that any reliance on its decision in Charisma Investment Company, N.V. v. Airport Systems, Inc. (In re Jet
Florida System, Inc.), 841 F.2d 1082 (11th Cir. 1988), that the new value
exception (11 U.S.C. § 547(c)(4)) only applies if any new value given remains
unpaid, is misplaced. In Jet Florida
System, the Eleventh Circuit was faced with determining whether rent payments
made by the debtor to a landlord after the debtor had vacated the premises were
subject to the new value exception. In
considering the exception, the court stated that § 547(c)(4) “has generally been read to require: (1) that the creditor
must have extended the new value after receiving the challenged payments, (2)
that the new value must have been unsecured, and (3) that the new value must
remain unpaid.” In re Jet Fla. Sys., at 1083.
The court ultimately rendered its decision by applying only the first
element and found that there was no new value given by the landlord since the
debtor had vacated the premises and therefore, no benefit was conferred upon
the estate.