On July 14, 2010, an involuntary bankruptcy petition was filed against Harvey Goldman & Company d/b/a Worldwide Equipment Company(the “Debtor”). The Court later entered an Order for Relief under Chapter 7 of the Bankruptcy Code and a trustee was appointed (the “Trustee”). On February 18, 2011, the Trustee filed a complaint against Shirley Arm and Milton Arm (the “Defendants”) seeking two recover 2 payments made in the preference period. The payments totaled $5,000. The Defendants moved to dismiss the Trustee’s preference complaint on the grounds that the value of the transfers sought to be avoided was less than the jurisdictional minimum of $5,850 in Section 547(b)(9).  The Trustee claims that Section 547(b)(9) does not apply.

Section 547(c)(9) was added to the Bankruptcy Code by the Bankruptcy Act of 2005 and provides:

(c) The trustee may not avoid under this section a transfer–

(9) if, in a case filed by a debtor whose debts are not primarily consumer debts, the aggregate value of all property that constitutes or is affected by such transfer is less than $5,850

With no citation of authority other than the language of Section 547(c)(9), the Trustee argues:

On its face, Section 547(c)(9) only applies to “a case filed by a debtor.” This case, however, was not a case filed by a debtor. Rather, it was filed as an involuntary bankruptcy case by a number of petitioning creditors. As such, Section 547(c)(9) does not apply to this adversary proceeding.