Union Bank v. Wolas
United States Supreme Court
502 U.S. 151 (1991)
In December 1986, ZZZZ Best Co., Inc. (Z Best) borrowed $7 million from Union Bank (the Bank) (defendant) pursuant to a revolving credit agreement and evidenced by a promissory note. The note required Z Best to pay interest on a monthly basis, accruing on the principal at a rate of .65 percent per year above the Bank’s reference rate. In July 1987, Z Best filed a Chapter 7 bankruptcy petition. Within 90 days prior to the filing, Z Best had transferred to the Bank two interest payments totaling approximately $100,000 as well as a $2,500 loan commitment fee. Wolas, the trustee appointed to Z Best’s bankruptcy (the trustee) (plaintiff), sought to recover the payments to the Bank under 11 U.S.C. § 547(b). The bankruptcy court concluded that the payments were not voidable under § 547(b) because they satisfied the ordinary course of business exception set forth at § 547(c)(2). The district court affirmed. The Court of Appeals for the Ninth Circuit reversed after ruling in a separate case that § 547(c)(2) was applicable only to short-term debt. The Bank petitioned the Supreme Court for certiorari.
Rule of Law
Holding and Reasoning (Stevens, J.)
Concurrence (Scalia, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 166,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.