Opinion ID: 2647462
Heading Depth: 3
Heading Rank: 1

Heading: New York City Shoes and Winstar Communications

Text: In New York City Shoes, we were faced with the question of “when a postdated check given by a debtor to a creditor should be deemed transferred for purposes of section 547(c)(4).” 880 F.2d at 679. The answer to this question bore on whether new value had been given before or after a preferential transfer, and therefore whether the new value defense was applicable. None of the relevant transactions or dates in the case occurred post-petition. Therefore, when we 10 announced the test for a defense under § 547(c)(4), and stated that the third requirement was that “the debtor must not have fully compensated the creditor for the ‘new value’ as of the date that it filed its bankruptcy petition,” id. at 680, the extra-statutory language we included regarding the petition date was not germane to our analysis. This language was dicta, and consequently not binding upon future courts. Nevertheless, in Winstar Communications, we referred to the three-part test announced in New York City Shoes as a holding. 554 F.3d at 402. Reference to the third requirement was again, however, immaterial to our disposition of the case. In Winstar Communications, the primary questions with respect to the new value defense were whether new value had been extended after the preferential transfer, and whether new value had been extended on an unsecured basis. Id. We quoted New York City Shoes for the principle that new value must be extended after a preferential transfer on an unsecured basis. See id. at 402. Because none of the relevant transactions occurred post-petition, our statement regarding the petition date was not pertinent to our analysis. The statement was, again, dicta and we are not bound by it here.1 1 We are mindful that numerous courts have adopted and followed this dicta as if it were a holding. See, e.g., In re Braniff, Inc., 154 B.R. 773, 784 (Bankr. M.D. FL. 1993) (referring to dicta from New York City Shoes as majority rule); In re Energy Coop., Inc., 130 B.R. 781, 789 (N.D. Ill. 1991) (citing New York City Shoes in holding that postpetition transactions between creditor and debtor do not limit new value defense). 11 Having established that no prior opinion binds us on the question presented, we turn to FLT’s other arguments. FLT contends that we need look no further than the text of the Bankruptcy Code in determining whether or not to consider post-petition payments. We agree; however, in doing so, we reach a different conclusion from the one Appellant urges regarding the plain meaning of the statute.