Case Summary:
The Trustee brought an adversary proceeding against Plains Marketing Canada under § 547(b) to recover payments the debtor made to Plains for the delivery of gasoline. Plains argued that the payments fell within the safe harbor provision of § 546(e) because they constituted settlement payments pursuant to three forward contracts. The Bankruptcy Court found that two contracts qualified as “forward contracts” under § 101(25) because they matured more than two days after the contracts were entered into. The third contract did not meet this definition. Because payments related to the forward contracts were protected by § 546(e), the Court granted Plains’s motion for summary judgment as to two of the contracts. Plains had also raised defenses under § 547(c)(2) and § 547(c)(4), but Plains failed to establish that the payments were made in the ordinary course of business or that new value had been given.

Statute/Rule References:
11 U.S.C. § 101(25)
11 U.S.C. § 101(51A)
11 U.S.C. § 546(e) -- Preferences
11 U.S.C. § 547(b) -- Preferences

Key Terms:
Forward Contract
Forward Contract Merchant
Maturity Date
Settlement