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In re Denochick
United States District Court for the Western District of Pennsylvania
287 B.R. 632 (2003)
Susan Lee Denochick (debtor) took out a debt-consolidation loan with NBOC. Susan’s sister, Sandra Krasinski (creditor), agreed to guarantee the loan. Denochick later filed for bankruptcy. Denochick had made payments on the loan to NBOC in the year prior to filing. Although the payments went to NBOC, Krasinski benefited from the payments indirectly because the payments reduced her exposure as guarantor of the loan. The bankruptcy trustee petitioned the bankruptcy court to avoid the payments to NBOC as preferential transfers and recover the payments from Krasinski. The bankruptcy court held that Krasinski was a creditor, that the transfer did not fall under any exceptions for preferential transfers, and that the trustee could recover the amount of the transfer from Krasinski. Krasinski appealed.
Rule of Law
Holding and Reasoning (Cindrich, J.)
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