In re National Gas Distributors, L.L.C.
United States Bankruptcy Court for the Eastern District of North Carolina
346 B.R. 394 (2006)
National Gas Distributors, LLC (NGD) was a purchaser and distributor of natural gas and other energy commodities. NGD financed its operations through Branch Banking and Trust Company (BB&T), using a line of credit, a working capital loan, and letters of credit. Paul Lawing, the owner of NGD, and his wife, Ann Lawing, personally guaranteed the loans. The financing was secured by assets owned by Ann. One of the loans was a line of credit in the principal amount of $1 million, which was entered into on March 31, 2003. The line of credit obligation was first set to mature on November 5, 2003, but was extended to December 23, 2005. NGD paid the outstanding balance of $755,329.80 on the line of credit on December 15, 2005. The working capital loan had a principal amount of $2.5 million and was entered into on September 27, 2004. The working capital obligation was originally set to mature on March 27, 2005, but was also extended to December 23, 2005. NGD paid the balance of $2,508,186.35 on the working capital loan on December 19, 2005. NGD petitioned for Chapter 11 bankruptcy on January 20, 2006. The bankruptcy trustee filed an action in bankruptcy court to recover NGD's two payments as preferential transfers under § 547 of the Bankruptcy Code (BC). The bankruptcy trustee moved for summary judgment. BB&T filed an affidavit that provided that paying the balance of an obligation within a few weeks of the maturity date is a typical and customary practice in the banking industry.
Rule of Law
Holding and Reasoning (Small, J.)
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