Pryor v. Zerbo

Defendant’s affirmative defense of contemporaneous exchange under Section
547(c)(1) is rejected. The obligations to Defendant’s parents that arose prior to or even
during the course of the divorce proceedings were not contemporaneous exchanges with
the Transfer, nor were those exchanges intended to be contemporaneous. Those
obligations preceded the Transfer and were released as a result of the Transfer.
Moreover, the parents’ loan does not qualify for the affirmative defense under
Section 547(c)(7). As Section 547(c)(7) stood prior to the enactment of BAPCPA, this
defense was for payments made on a bona fide debt to the extent made for alimony,
maintenance or support of the spouse or former spouse of the debtor or a child of the
debtor. Here, the parents’ loan does not qualify for this defense.
Conclusion
Summary judgment will be granted in favor of Defendant and denied as to the
Trustee on Counts 1, 2, 3, and 5 of the Trustee’s Amended Complaint. Summary
judgment is denied as to both parties on Counts 4, 6, 7, and 8. A trial date will be
scheduled by the Court on these remaining claims. A separate judgment hereon will be
entered.
Dated: Central Islip, New York
November 26 , 2008
/s/ Alan S. Trust
Alan S. Trust
United States Bankruptcy Judge
Page 29 of 29
Case 8-06-08124-ast Doc 25 Filed 11/26/08 Entered 11/26/08 13:31:06