Court Opinion

ID: 3035828
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:53:17.294357+00
Date Added: 2024-06-11T11:40:53.721807
License: Public Domain

United States Bankruptcy Appellate Panel
                            FOR THE EIGHTH CIRCUIT

                              _______________________

                                   No. 04-6020SI
                              ______________________

In re: ACCESSAIR, Inc.,                  *
                                         *
        Debtor                           *
------------------------                 *
Anita Shodeen, Trustee,                  *
                                         *
      Plaintiff-Appellee                 *    Appeal from the United States
                                         *    Bankruptcy Court for the
            v.                           *    Southern District of Iowa
                                         *
Airline Software, Inc.                   *
                                         *
      Defendant-Appellant                *

                           __________________________

                             Submitted: August 26, 2004
                              Filed: September 22, 2004
                           __________________________

Before MAHONEY, VENTERS, and McDONALD, Bankruptcy Judges.

McDONALD1, Bankruptcy Judge

      1
        The Honorable David P. McDonald, United States Bankruptcy Judge for
the Eastern District of Missouri, sitting by designation.
                                        -1-
       Airline Software, Inc. (“Airline Software”) appeals from the judgment of the
bankruptcy court2 in favor of Anita Shodeen, Trustee, holding that Airline Software
failed to meet its burden of proof in demonstrating that the Trustee could not avoid
six preferential transfers that Debtor, Access Air, remitted to Airline Software under
either the ordinary course or subsequent new value defenses contained in 11 U.S.C.
§§ 547(c)(2) and (c)(4). We affirm.

                                          I.

       Access Air and Airline Software entered into an agreement in 1997 (the
“Software Agreement”), whereby Airline Software agreed to grant Access Air a non-
exclusive license to utilize an airline management software package (the “Software”)
and to install and support the Software. Access Air agreed to remit a down payment
and then make monthly payments on the first of each month to Airline Software in
exchange for the non-exclusive license and support. The parties amended the
Software Agreement in February 1999 to allow Access Air access to the source code
for the Software in exchange for an additional $250,000 payment (the “Software
Agreement Amendment”).

       The parties executed another agreement on October 5, 1999 (the “October
Agreement”). The October Agreement gave Access Air and its customers the right
to access a central reservation system. The October Agreement required Access Air
to pay Airline Software $25,000 and to pay Airline Software $1,200 per day for each
day Airline Software spent installing the applicable software onto Access Air’s
computer system. Also, the October Agreement mandated that Access Air pay
$12,500 of the contract price prior to Airline Software’s installation of the software
and hardware and then to make monthly payments on the first of each month. The

      2
       The Honorable Russell J. Hill, United States Bankruptcy Judge for the
Southern District of Iowa.
                                         -2-
October Agreement further required Access Air to reimburse Airline Software’s
employees for their actual expenses incurred while installing and configuring the
applicable hardware and software.

      Access Air remitted six payments (the “Preference Payments”) to Airline
Software totaling $103,006.75 during the preference period, which began on August
31, 1999. Access Air remitted all six of the Preference Payments to Airline Software
under either the Software Agreement or the Software Agreement Amendment.

       Debtor filed its petition for relief under Chapter 11 of the United States
Bankruptcy Code on November 29, 1999. The bankruptcy court later converted the
case to a proceeding under Chapter 7 on the motion of the United States Trustee. The
Trustee then filed a preference action under 11 U.S.C. § 547(b) against Airline
Software seeking to avoid the Preference Payments. The Trustee also sought to
recover the Preference Payments from Airline Software under § 550(a)(1).

      Airline Software asserted that the Trustee could not avoid the Preference
Payments for two reasons. First, Airline Software contended that the Trustee could
not avoid the Preference Payments because Access Air made them in the ordinary
course under § 547(c)(2). Second, Airline Software argued that the Trustee could not
avoid the Preference Payments under § 547(c)(4) because it provided new value to
Access Air subsequent to receiving some of the Preference Payments when it
provided the services to Access Air pursuant to the October Agreement.

      Prior to trial, the parties stipulated that the Preference Payments were
preferential under § 547(b). Thus, the only issues tried were whether Access Air
remitted the Preference Payments in the ordinary course and whether Airline Software
provided new value to Access Air subsequent to receiving at least some of the
Preference Payments.

                                        -3-
      Because the parties stipulated that the Preference Payments were preferential
under § 547(b), the Trustee did not produce evidence at trial. Airline Software
produced the testimony of its president, Gorden Rosen, and Access Air’s director of
management information systems, Jan Burroughs, to support its affirmative defenses.
Airline Software also introduced a ledger of Access Air’s payments to it as well as
copies of some of Access Air’s checks and wire transfers.

       Rosen testified that Access Air failed to timely remit the monthly payments
from the beginning of the parties’ relationship, although Access Air’s tardiness
became worse over time. Rosen also remarked that he did speak with officers at
Access Air concerning Access Air’s failure to remit timely monthly payments during
the course of the parties’ relationship. Both Rosen and Burroughs stated that Rosen
notified Access Air in August 1999 that if it did not make payments to Airline
Software, Airline Software would stop providing support for the Software. Rosen and
Burroughs both opined that Access Air could not operate its business without Airline
Software supporting the Software.

       Burroughs stated that after Rosen had demanded Access Air’s payment by wire
transfer in August 1999, she contacted Nick Miller, apparently an employee in Access
Air’s accounting department, to negotiate a payment plan with Airline Software.
Burroughs stated that Access Air remitted its two largest payments at the onset of the
preference period, totaling approximately $75,000, to Airline Software shortly after
the exchange among herself, Rosen and Miller. Burroughs remarked that Access
Air’s payment pattern to Airline Software just prior to and during the preference
period was similar to its payment pattern to other vendors.

       Rosen testified that Airline Software transmitted all of its accounting records
to a company called Giro, located in Tulsa, Oklahoma, pursuant to Giro’s prospective
purchase of the Software from Airline Software. Giro apparently experienced
financial difficulty shortly after Airline Software provided it with the records and it

                                          -4-
never purchased the Software. Rosen stated that Giro destroyed the records sometime
in March, 2000 and that Airline Software failed to make any copies of the records.
Therefore, although Airline Software did produce at trial the dates of Access Airline’s
payments to it, Rosen could not match those payments to any particular invoice.

      Rosen also testified concerning Airline Software’s experience with two other
regional air carriers similar to Access Air, Midway Airline and Presidential. Rosen
noted that the payment history of Midway and Presidential were generally similar to
Access Air’s payment history. Rosen, however, could not testify as to the specific
payment history of either Midway or Presidential or to Access Air because Airline
Software no longer possessed its accounting records.

        Finally, Rosen testified that he did install the reservation software on Access
Air’s computer system sometime in October 1999 pursuant to the October Agreement.
Rosen, however, stated that Access Air did not remit the $12,500 to Airline Software
prior to installation as required by the October Agreement. And Rosen noted that it
was Airline Software’s general policy not to provide services until the customer
actually made the down payment. Rosen further testified that there is no record of
Airline Software receiving the $1,200 per diem payment from Access Air for its
installation of the software as required under the October Agreement. Rosen
additionally conceded that he had no record of anyone at Airline Software submitting
an expense report to Airline Software for reimbursement as called for in the October
Agreement.

       The bankruptcy court entered judgment in favor of Trustee. The bankruptcy
court specifically found that it did not find Rosen’s testimony to be credible. Also,
the bankruptcy court noted that apart from Rosen’s testimony, Airline Software had
failed to demonstrate the nature of the parties’ relationship prior to the preference
period. The bankruptcy court additionally found the scant documentary evidence in
the record demonstrated that Access Air’s payment to Airline Software was

                                          -5-
substantially more delinquent in the preference period (93 days from invoice) versus
the pre-preference period (23.5 days from invoice). Further, the bankruptcy court
observed that both Rosen and Burroughs testified that Airline Software applied
pressure to Access Air to remit payment and that Access Air did make two unusually
large payments during the preference period to Airline Software in response to that
pressure. Based on this record, the bankruptcy court found that Airline Software
failed to meet its burden of proof in demonstrating that Access Air’s payment of the
Preference Payments was subjectively ordinary under § 547(c)(2)(B).

       The bankruptcy court also found that Airline Software failed to demonstrate
that the preferential transfers were objectively ordinary as required by § 547(c)(2)(C).
The bankruptcy court premised this ruling on its finding that Airline Software failed
to produce any credible evidence of the prevailing terms in the relevant industry.
Therefore, the bankruptcy court held that Airline Software failed to establish that the
preferential transfers were objectively ordinary under § 547(c)(2)(C).

       Finally, the bankruptcy court held Airline Software failed to establish that it
provided new value to Access Air subsequent to receiving some of the Preference
Payments. The Court held that although the evidence indicated that the parties did
in fact execute the October Agreement, there was no credible evidence that Airline
Software actually provided the software services described in the October Agreement.

      Airline Software appeals from the judgment of the bankruptcy court arguing
that based on the evidence produced at trial, the bankruptcy court’s finding that
Airline Software failed to meet its burden of proof under both §§ 547(c)(2) and (c)(4)
was erroneous. We affirm.

                                          -6-
                                          II.

        We will not set aside the bankruptcy court’s findings of fact unless those
findings are clearly erroneous. Fed. R. Bankr. P. 8013. A finding is clearly erroneous
if, after examining the entire record, we are left with a definite and firm conviction
that the bankruptcy court has made a mistake. Anderson v. City of Bessemer City,
470 U.S. 564, 573 (1985). Also, when reviewing the evidentiary record, we will give
due deference to the bankruptcy court’s opportunity to judge the credibility of
witnesses. Fed. R. Bankr. P. 8013. We will review the bankruptcy court’s
determination of questions of law on a de novo basis. Holliday v. Kline (In re Kline),
65 F.3d 749, 750 (8th Cir. 1995).

       Here, Airline Software is challenging the bankruptcy court’s determination that
Airline Software failed to produce sufficient evidence to meet its burden of proof in
establishing its affirmative defenses. An attack on the sufficiency of the evidence to
sustain the bankruptcy court’s judgment is a challenge to the factual findings of the
bankruptcy court. Sholdan v. Dietz (In re Sholdan), 217 F.3d 1006, 1010 (8th Cir.
2000). Accordingly, we will review the bankruptcy court’s judgment under a clearly
erroneous standard. Id.

                                         III.

A. Introduction.

      Airline Software, as the transferee of the Preference Payments, has the burden
of establishing its ordinary course and subsequent new value defenses by a
preponderance of the evidence. 11 U.S.C. § 547(g); Official Plan Comm. v. GE
Capital, Corp. (In re Omniplex Communications Corp.), 297 B.R. 573, 576 (Bankr.
E.D. Mo. 2003). Thus, because it bore the burden of proof on its affirmative
defenses, Airline Software also had the burden of establishing a sufficient evidentiary

                                          -7-
record to support its affirmative defenses. Leonard v. First Commercial Mortgage
Co. (In re Circuit Alliance, Inc.), 228 B.R. 225, 235 n. 17 (Bankr. D. Minn. 1998).

B. The Ordinary Course Defense.

1. Introduction

       Airline Software first argues that the bankruptcy court erred in finding that it
failed to establish that Access Air remitted the Preference Payments to it in the
ordinary course under § 547(c)(2). Section 547(c)(2) requires that the transferee
establish that the transfer in question was both subjectively and objectively ordinary.
Jones v. United Sav. & Loan Assoc. (In re U.S.A. Inns of Eureka Springs of
Arkansas), 9 F.3d 680, 683 (8th Cir. 1993). Section 547(c)(2)(B) requires the
transferee to demonstrate that the transfer was subjectively ordinary in that the debtor
made the transfer in the ordinary course of the business or financial affairs of the
debtor and the transferee. Id. The transferee must also establish under § 547(c)(2)(C)
that the transfer was objectively ordinary in that the debtor made the transfer
according to ordinary business terms. Id.

      The bankruptcy court found Airline Software failed to produce sufficient
credible evidence to establish either the subjective or objective prong of the ordinary
course defense. After reviewing the evidentiary record, we find that the bankruptcy
court did not clearly err in making that finding.

2. The bankruptcy court was free to find Rosen’s testimony not to be credible.

      As an initial matter, the bankruptcy court noted that Airline Software relied
heavily upon the testimony of Rosen in attempting to establish that the Preference
Payments were both subjectively and objectively ordinary. And the bankruptcy court
explicitly found that Rosen’s testimony was not credible. Airline Software argues

                                          -8-
that the basis on which the bankruptcy court found Rosen’s testimony lacked
credibility was not proper. We disagree.

       The bankruptcy court specifically found that Rosen was not credible because
he testified that the reason he did not produce Airline Software’s records upon the
Trustee’s request for production was because he had shipped them to Giro, which
destroyed them. The court stated it was highly skeptical of Rosen’s proffered reason
for not producing the records because an experienced business person such as Rosen
would have made a copy of those records before shipping them.

       Airline Software argues that because the Trustee did not file a motion for
sanctions for Airline Software’s failure to produce the documents, the court
improperly disregarded Rosen’s testimony. The court, however, was not sanctioning
Airline Software for a discovery violation but was merely observing that it believed
Rosen was probably lying. This determination is clearly within the bankruptcy
court’s purview of judging the credibility of a witness, which we must give
significant weight under Rule 8013. Johnson v. Fors (In re Fors), 259 B.R. 131, 140
(B.A.P. 8th Cir. 2001).

3. The bankruptcy court’s finding that the Preference Payments were not subjectively
ordinary was not clearly erroneous.

       The overriding factor as to whether the transfers in question were subjectively
ordinary under § 547(c)(2)(B) is whether there is some consistency between the
payments debtor made to the transferee prior to the preference period and the
preference payments. Lovett v. St. Johnsbury Trucking, 931 F.2d 494, 497-98 (8th
Cir. 1991). Airline Software argues that it did produce sufficient evidence that
established that Access Air’s payments to it during the preference period were
consistent with the parties’ prior course of dealing because it demonstrated that
Access Air paid it late in both the pre-preference and preference period. Clearly, a

                                         -9-
late payment in the preference period may be subjectively ordinary if the debtor also
paid late in the pre-preference period. Id. at 498. A tardy preference payment,
however, is not subjectively ordinary if it is substantially more tardy than the debtor’s
late payments during the pre-preference period. Official Plan Comm. v. Expeditors
Int’l of Washington, Inc. (In re Gateway Pac. Corp.), 153 F.3d 915, 918 (8th Cir.
1998).

       Here, the documentary evidentiary produced at trial indicated that Access Air’s
tardiness of payments during the preference period increased by 294% as compared
to the pre-preference period. Thus, although it appears that Access Air’s pattern was
to pay late both in the pre-preference and preference period, the record demonstrates
that the tardiness of its payments become substantially more significant during the
preference period. Accordingly, the bankruptcy court’s finding that the Preference
Payments were not subjectively ordinary is not clearly erroneous.

        Airline Software also assails the bankruptcy court’s judgment because the
bankruptcy court in its analysis omitted several payments that Access Air made to it.
It is true that there are payments that the bankruptcy court did not include in its
analysis. A review of the evidentiary record, however, indicates that Airline Software
failed to provide the invoice or the date of the invoice corresponding to those
payments. Rather, Airline Software simply provided the bankruptcy court with the
date of each payment.

       Because Airline Software bears the burden of proof on its ordinary course
defense, it had the burden of establishing some baseline of dealings between the
parties prior to the preference period to enable the bankruptcy court to compare
Access Air’s payment practice in the preference period with its prior payment
practices. Cassirer v. Herskowitz (In re Schick), 234 B.R. 337, 348 (Bankr. S.D.N.Y.
1999). Airline Software’s mere provision of the dates of Access Air’s payments to
it does not even remotely establish such a baseline of dealings between the parties.

                                          -10-
       The bankruptcy court also found that Airline Software failed to establish that
the Preference Payments were subjectively ordinary because Access Air made at least
two of the payments in response to Rosen’s threat in August 1999 to stop supporting
the Software. Any payment that the debtor makes to the creditor in response to the
creditor’s unusual collection efforts is not subjectively ordinary for purposes of §
547(c)(2)(B). Cent. Hardware Co. v. The Walker-Williams Lumber Co. (In re Spirit
Holding Co., Inc.), 214 B.R. 891, 898 (E.D. Mo. 1997) aff’d. 153 F.3d 902 (8th Cir.
1998). Airline Software argues that the bankruptcy court erred in making this
conclusion because there is no evidence that Access Air actually remitted any of the
Preference Payments because of Rosen’s threat. We disagree with Access Air’s
assessment of the record.

      Both Burroughs and Rosen testified that Rosen demanded payment from
Access Air in August 1999 and threatened that he would stop supporting the Software
if Access Air failed to make a payment.3 And Burroughs testified that Rosen become
more insistent that Access Air make payment in August 1999. Further, both
Burroughs and Rosen noted that Access Air absolutely required Airline Software’s
support of the Software to continue its operation. Also, Burroughs testified that in
response to Rosen’s threat she contacted Miller to negotiate a payment plan and that
Access Air remitted two of the Preference Payments following such negotiations.
This record amply supports the bankruptcy court’s finding that Access Air made at

      3
         Airline Software also contends that the bankruptcy court was not free to
disbelieve Rosen’s testimony with respect to whether the Preference Payments
were made in the ordinary course of business but believe Rosen’s testimony that
he did demand payment from Access Air in August 1999. Burroughs’ testimony,
however, by itself supports the bankruptcy’s court finding. Also, the bankruptcy
court as a finder of fact is free to find portions of a witness’ testimony credible
while finding other portions non-credible. Allen v. Chicago Transit Authority,
317 F.3d 696, 703 (7th Cir. 2003).
                                        -11-
least the first two Preference Payments in response to Rosen’s heightened collection
efforts.

       After reviewing this record, we are not left with a definite and firm belief that
the bankruptcy court erred in finding that Airline Software failed to establish by a
preponderance of the evidence that Access Air’s payment of the Preference Payments
was subjectively ordinary under § 547(c)(2)(B). Accordingly, the trial court’s finding
that Airline Software failed to carry its burden of proof under § 547(c)(2)(B) is not
clearly erroneous.

4. The bankruptcy court’s finding that the Preference Payments were not objectively
ordinary is not clearly erroneous.

       Section 547(c)(2)(C) requires the transferee to demonstrate that the debtor
made the preferential transfer according to the ordinary business terms prevailing
within the debtor’s industry. Jones v. United Sav. & Loan Assoc. (In re U.S.A. Inns),
9 F.3d 680, 684 (8th Cir. 1993). Thus, to meets its burden under § 547(c)(2)(C), the
transferee must produce objective evidence of the range of prevailing practices
utilized within the debtor’s industry involving transactions similar to the transfer in
question and that the transfer fits into that range. Id.

      The Bankruptcy Court found that Airline Software failed to meet its burden
under § 547(c)(2)(C) because it failed to produce objective evidence of the general
range of terms prevailing within the industry. Airline Software argues that the
bankruptcy court’s finding is erroneous because the testimony of Burroughs and
Rosen established the prevailing industry standards as a matter of law. We disagree.

      It is certainly true that an employee of the transferee can establish the
prevailing industry standards based on that employee’s personal knowledge of those
standards. In re U.S.A. Inns, 9 F.3d at 685-686. Here, however, as illustrated above,

                                          -12-
the bankruptcy court acted well within its very wide discretion under Rule 8013 in
not finding Rosen’s testimony to be credible on this issue.

        Also, even if the bankruptcy court were inclined to find Rosen’s testimony to
be credible on this issue, Rosen’s testimony is not objective evidence of industry
standards. Rosen only testified that Airline Software’s experience with the payment
patterns of two other regional air carriers was generally similar to its experience with
Access Air. Thus, Rosen’s testimony, even if credible, failed to establish even the
broadest range of practices within Access Air’s industry. Further, Rosen’s testimony
only covers Airline Software’s own subjective experience, which is insufficient by
itself to establish the range of terms prevailing within the industry as required by §
547(c)(2)(C). In re Midway Airlines, 69 F.3d 792, 797-98 (7th Cir. 1995); Lawson
v. Ford Motor Co. (In re Roblin Industr., Inc.), 78 F.3d 30, 43 (2d Cir. 1996).

       Concerning Burroughs’ testimony, she only testified that Access Air’s payment
history to Airline Software was similar to its payment history to other vendors just
prior to and during the preference period. As with the creditor’s subjective
experiences with its other customers, the debtor’s subjective payment history to its
other creditors is not objective evidence of the range of terms prevailing within the
relevant industry as required by § 547(c)(2)(C). Gulf City Seafoods v. Ludwig Shrimp
Co, Inc. (In re Gulf City Seafoods), 296 F.3d 363, 368 (5th Cir. 2002); Peltz v.
Gulfcoast Workstation Group (In re Bridge Info. Sys.), 311 B.R. 774, 780 (Bankr.
E.D. Mo. 2004); Seaver v. Allstate Sales & Leasing Corp. (In re Sibilrud), 308 B.R.
388, 398 (Bankr. D. Minn. 2004). Rather, the transferee must establish the general
range of industry practice by introducing objective evidence outside it or the debtor’s
subjective experience to satisfy its burden of proof under § 547(c)(2)(C). In re U.S.A.
Inns, 9 F.3d at 684. Airline Software failed to produce such evidence here.

       After reviewing this record, we are not left with a definite and firm conviction
that the bankruptcy court made a mistake in finding that Airline Software failed to

                                          -13-
establish that Access Air made the Preference Payments to it according to ordinary
business terms. Therefore, the bankruptcy court’s finding that Airline Software failed
to carry its burden of proof under § 547(c)(2)(C) is not clearly erroneous.

C. The Subsequent New Value Defense.

       Airline Software also contends that the bankruptcy court erred in finding that
it did not provide subsequent new value to Access Air after receiving at least some
of the Preference Payments. We disagree.

       Section 547(c)(4) states that a trustee may not avoid a preferential transfer to
the extent that the transferee, after receiving the preferential transfer, extends new
value to the debtor on an unsecured basis and that the new value remains unpaid. As
with the ordinary course defense discussed above, because the subsequent new value
defense contained in § 547(c)(4) is an affirmative defense to a preference action, the
transferee has the burden of proof and production. Kroh Bros. Dev. Co. v.
Continental Constr. Eng’r. (In re Kroh Bros.), 930 F.2d 648, 652 (8th Cir. 1991).
Specifically, in order to prevail on a subsequent new value defense under § 547(c)(4),
the creditor must establish that: (1) the creditor received a transfer that is otherwise
avoidable as a preference under § 547(b); (2) after receiving the preferential transfer,
the creditor advanced new value to the debtor on an unsecured basis; and (3) the
debtor did compensate the creditor with an “otherwise unavoidable” transfer for the
new value as of the petition date. Id.

       Here, the bankruptcy court found that Airline Software failed to establish that
it extended new value to Access Air after it had received at least some of the
Preference Payments. Airline Software maintains that this finding is incorrect
because the record demonstrates that it did provide new value to Access Air when it
installed the software and hardware with respect to the October Agreement.

                                          -14-
       The record, however, indicates that Access Air never remitted the $12,500
down payment to Airline Software. And Rosen testified that it was Airline
Software’s general practice not to provide the services contained in a contract until
the client remitted the down payment. Further, there is no evidence in the record that
Access Air ever remitted the $1,200 per diem or that any employee of Airline
Software ever submitted an expense report to Access Air.

        The only evidence in the record that supports Airline Software’s contention
that it did provide services under the October Agreement is Rosen’s testimony. The
bankruptcy court, however, as we have noted above, acted within its broad discretion
under Rule 8013 in not finding Rosen’s testimony to be credible.

      Airline Software also points to a $5,000 payment that Access Air made to it
during the preference period in support of its argument that it did provide Access Air
with some service under the October Agreement. Airline Software posits that
because the Trustee did not seek to avoid this payment as preferential under § 547(b),
the payment must have been the down payment on the October Agreement.

      The October Agreement, however, required Access Air to remit a down
payment of $12,500. Also, Airline Software had the burden of producing some
evidence linking the $5,000 payment to the October Agreement rather than asking the
bankruptcy court to make a supposition that the $5,000 payment somehow related to
the October Agreement. Furthermore, even if we were to find that the $5,000
payment was possibly some evidence that Airline Software did provide service to
Access Air under the October Agreement, we will not substitute our interpretation of
the record for the bankruptcy court’s interpretation under the clearly erroneous
standard. Wealder Oil & Gas, Inc. v. Southwestern Glass Co., Inc. (In re
Southwestern Glass Co., Inc.), 332 F.3d 513, 517 (8th Cir. 2003).

                                         -15-
       After reviewing the record, we are not left with a definite and firm conviction
that the bankruptcy court made a mistake in finding that Airline Software failed to
establish by a preponderance of the evidence that it provided new value to Access
Air. Accordingly, the bankruptcy court’s finding that Airline Software failed to
establish that the Trustee could not avoid the Preference Payments under § 547(c)(4)
is not clearly erroneous.

                                         IV.

       The rather thin documentary evidence Airline Software supplied to the
bankruptcy court demonstrates that Access Air’s tardiness in its payments to Airline
Software increased significantly during the preference period. Further, with respect
to several payments that the bankruptcy court did not include in its analysis, Airline
Software failed to produce evidence as to what invoice corresponded to those
payments. Also, the record supports the bankruptcy court’s conclusion that Access
Air remitted the two largest Preference Payments in response to Airline Software’s
intensified collection efforts. Finally, Airline Software failed to produce sufficient
evidence of the prevailing standards within the relevant industry. Accordingly, the
bankruptcy court’s finding that Airline Software failed to establish by a
preponderance of the evidence that Access Air remitted the Preference Payments in
the ordinary course under § 547(c)(2) is not clearly erroneous.

       The record also indicates that Access Air never made the $12,500 down
payment to Airline Software as required by the October Agreement and that it was
Airline Software’s general policy not to provide the service until the customer
remitted the down payment. Also, there is no evidence that any employee of Airline
Software requested reimbursement from Access Air for any expenses incurred while
installing the software as called for in the October Agreement. Finally, Access Air
did not tender the $1,200 per diem to Airline Software as required by the October
Agreement. Therefore, the bankruptcy court’s finding that Airline Software failed to

                                         -16-
establish by a preponderance of the evidence that it provided new value to Access Air
is not clearly erroneous.

      Therefore, we affirm the judgment of the bankruptcy court.

                                        -17-