Court Opinion

ID: 2962090
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:52:32.32309+00
Date Added: 2024-06-11T11:42:25.952412
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-2463                       IN RE RALAR DISTRIBUTORS, INC., ET AL.,                                       Debtors,                                      __________                              RALAR DISTRIBUTORS, INC.,                              HALMAR DISTRIBUTORS, INC.,                               Plaintiffs, Appellants,                                          v.                              RUBBERMAID, INCORPORATED,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. Frank H. Freedman, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                            Cyr and Boudin, Circuit Judges,                                            ______________                          and Burns,* Senior District Judge.                                      _____________________                                 ____________________             Paul R. Salvage  with whom Michael  J. Coyne, Susan L.  Burns and             _______________            _________________  _______________        Bacon & Wilson, P.C. were on brief for appellants.        ____________________             Dustin  F.  Hecker with  whom  Cornelius  J.  Chapman, V.  Denise             __________________             ______________________  __________        Saunders and McDermott, Will & Emery were on brief for appellee.        ________     _______________________                                 ____________________                                  September 14, 1993                                 ____________________                                   ___________________        *Of the district of Oregon, sitting by designation.                    CYR, Circuit Judge.   Chapter 11 debtors  Ralar Distri-                    CYR, Circuit Judge.                         _____________          butors, Inc. and Halmar Distributors, Inc. (hereinafter: "debtor"          or "R-H") appeal  a district court  order affirming a  bankruptcy          court's award of  summary judgment to Rubbermaid,  Inc. ("Rubber-          maid")  in R-H's  adversary  proceeding  to  recover  a  $453,000          preferential transfer.  We affirm.                                          I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    R-H,  a wholesale  distributor  of household  products,          sold Rubbermaid and non-Rubbermaid merchandise  to several retail          store  chains,  including   Caldor.    Between  1987   and  1989,          Rubbermaid and Caldor entered into a series  of annual contracts,          the latest executed in March 1989, which the parties refer  to as          an "advertising  support program" ("ASP").  Rubbermaid authorized          Caldor  to  incur  expense  for  promotional  ads  of  Rubbermaid          products subject  to reimbursement  by Rubbermaid.   Rather  than          reimburse  Caldor  directly  for  incurring these  ASP  expenses,          however,   Rubbermaid  arranged  with  R-H,  which  was  never  a          signatory to the ASP agreement, to serve as a go-between.  Caldor          would  incur the  ASP expenses,  then deduct  them from  the next          invoice it received from R-H.  R-H routinely treated Caldor's ASP          expenses  as  credits  against Caldor's  account  with  R-H ("ASP          credit").  To offset these ASP  credits, R-H in turn would reduce          its next payment for Rubbermaid  merchandise by the amount of its          most  recent ASP  credit to Caldor.   The  net effect of  the ASP                                          2          transaction on R-H's books was a "wash."                    On  October 16,  1989,  R-H commenced  its  chapter  11          reorganization proceeding.  In its adversary proceeding complaint          against  Rubbermaid,  R-H  alleged  that  Rubbermaid  received  a          voidable  preferential transfer "on or about" July 24, 1989, when          it authorized Caldor to offset ASP expenses totalling $453,000 as          ASP credits on  Caldor's account with R-H.   The bankruptcy court          entered summary  judgment for Rubbermaid  on the ground  that the          ASP credits  merely constituted  a "recoupment  of mutual  rights          under one transaction."  See infra notes 1 and 10.   The district                                   ___ _____          court affirmed.                                          II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________                    Bankruptcy  Code    547(b)   sets  out  the   essential          elements of a voidable preference:                    (b) Except  as provided in subsection  (c) of                    this section [setting  out defenses to avoid-                    ance], the trustee may avoid  any transfer of                    an interest of the debtor in property                          ________ __ ___ ______ __ ________                    (1)  to  or for  the  benefit  of a  creditor                         [viz., Rubbermaid];                          ____                    (2)  for or on account  of an antecedent debt                         owed by the debtor  before such transfer                         was made;                    (3)  made while the debtor was insolvent;                    (4)  made                            (A)  on  or within  90  days before  the                              date of the  filing of the petition                              . . . ; and                    (5)  that  enables such  creditor to  receive                         more than such creditor would receive if                                                    (A)  the case were a case under  chapter                              7 of this title  [11 U.S.C.    701-                                          3                              766];                         (B)  the transfer had not been made; and                         (C)  such creditor  received payment  of                              such debt to the extent provided by                              the  provisions of  this title  [11                              U.C.S.    101-1330].          11  U.S.C.    547(b)  (emphasis  added).    A  "transfer"  of the          debtor's "property," within the preference period, that enables a          creditor to realize more than it would have received on its claim          in a chapter 7 liquidation of  the property of the debtor estate,          see Bankruptcy Code   726, 11 U.S.C.   726, violates the theme of          ___          equality of distribution among all creditors of like class.  H.R.          Rep.  No. 595,  95th Cong.,  2d Sess.  177-78, reprinted  in 1978                                                         _________  __          U.S.C.C.A.N.  5787, 5963, 6138 [hereinafter:  H.R. Rep. No. 595].          Section   547(b)   is   designed    to   deter   creditors   from          "dismember[ing] the  debtor during [its] slide  into bankruptcy."          Id. at 177.          ___                    R-H contended that the net effect of the challenged ASP          credits was to  permit Rubbermaid to receive the entire "benefit"          of the $453,000 ASP credit  (i.e., the account receivable  Caldor                                       ____          owed R-H) which otherwise  would have been apportioned among  all          of R-H's unsecured creditors, not merely Rubbermaid, in the event          of a chapter  7 liquidation.  The bankruptcy  court disagreed, on          the  ground that  the ASP  credits  effected no  "transfer of  an          interest of the debtor in property."1                                        ____________________               1The bankruptcy court explained its rationale as follows:               There   are  two   difficulties  with   [the  Debtors']               argument.  First, there never was a $453,000 receivable               due  to the  Debtors from  Caldor.   The entire  Caldor               receivable was, with the Debtors' consent, at all times                                          4                    Appellant R-H characterizes  the ASP transactions quite          differently:  "On  or about" July 24, 1989, Caldor  owed R-H more          than  $453,000 for  merchandise  previously  purchased from  R-H.                              ___________          Thus, R-H held an account  receivable    an enforceable  contract          claim in the amount of $453,000 against Caldor    which assumedly          became property of  the hypothetical  R-H chapter  7 estate,  see                                                                        ___          Bankruptcy Code   541,  11 U.S.C.   541, hence available  for pro                                                                        ___          rata distribution among  all R-H unsecured creditors,  not merely          ____          Rubbermaid.   Instead, however,  R-H in effect  "released" Caldor          from its obligation to pay  R-H the full $453,000 account receiv-          able, in order to effect reimbursement of the ASP expenses Caldor          was entitled to  receive from Rubbermaid under their separate ASP          contract, thereby  conferring an indirect  "benefit" upon Rubber-                                           ________                                        ____________________               subject to advertising  credits which turned out  to be               $453,000.  Second, there never was a $453,000 debt owed               by  the Debtors to Rubbermaid.  The entire indebtedness               owed  Rubbermaid was at  all times subject  to the same               credit  arrangement.    To  put  it  another  way,  the               agreement made among the Debtors, Caldor and Rubbermaid               prevented  any  calculation  of  indebtedness  owed  by               Caldor  to the  Debtors,  or  owed  by the  Debtors  to               Rubbermaid, without taking into account the advertising               costs incurred  by  Caldor with  respect to  Rubbermaid               products.   Because the parties expressly agreed to the               assertion   of  the   advertising   credits  in   their               respective  sales  transactions,   application  of  the               credits constitutes recoupment  of mutual rights  under               one   transaction.     Without   that  agreement,   the               advertising  and   sales  would  consist   of  separate               transactions and  there would not even be  the right of               setoff vis-a-vis  Caldor and  the Debtors  or vis-a-vis               the  Debtors  and  Rubbermaid.    See,  generally,   on               recoupment and  setoff, In re B  & L Oil, 782  F.2d 155                                       ________________               (10th Cir. 1986) . . . .          Ralar Distribs. v.  Rubbermaid, Inc. (In re Ralar Distribs.), No.          _______________     ________________  _____________________          90-4222, slip op. at 3-4 (Bankr. D. Mass. Sept. 4, 1991).                                          5          maid.    See  Bankruptcy  Code    101(54),  11  U.S.C.    101(54)                   ___          (broadly  defining  "transfer"  as including  both  "direct"  and          "indirect"  modes of disposing of  property); see also Kellogg v.                                                        ___ ____ _______          Blue Quail Energy,  Inc. (In re Compton Corp.), 831 F.2d 586, 591          ________________________  ___________________          (5th Cir. 1987) (mere  "circuity of arrangement" cannot redeem  a          transaction  which  has  the  effect  of  a  preference)  (citing                                        ______          National Bank of Newport v. National Herkimer Cty. Bank, 225 U.S.          ________________________    ___________________________          178, 184 (1912)).                    Rubbermaid counters that such  ASP arrangements are too          customary in  wholesale-retail trade  to be  considered preferen-          tial, and that this voluntary ASP arrangement constituted a long-          established "course of dealing" among  the parties.  If a "trans-          fer" occurred at all, says  Rubbermaid, R-H received the  benefit          of  the transfer because  Rubbermaid accepted $453,000  less from          R-H   for   household  merchandise   previously   purchased  from          Rubbermaid,  and if anyone received a voidable "transfer" from R-          H,  it was  Caldor.   Furthermore, these  ASP credits  ultimately                      ______          produced a "wash" on R-H's books, documenting the fact that there          was no net diminution in either R-H's property or the property of          its hypothetical  chapter 7 estate.   Finally, recovery  of these          transfers from Rubbermaid would result in an unjust enrichment to          R-H,  which realized  the  benefits  from the  use  of these  ASP          credits in reducing its outstanding debt to Rubbermaid, but would          now recoverthe same$453,000 forthe benefitof itschapter 11estate.                    There  is surface  appeal  to  the  arguments  of  both                                          6          parties, though both  are wide of their  mark.2  If borne  out by          the  evidence, the  contentions advanced  by  R-H arguably  would          comport  with the  policy of  equality of  distribution,  and R-H          correctly asserts that it is  the effect of the alleged transfer,                                            ______          not the subjective intent of the parties, which primarily governs          ___          the section 547(b) analysis.  See 4 Lawrence P. King, Collier  on                                        ___                     ___________          Bankruptcy    547.01,  at   547-13  (and  cases   cited  therein)          __________          [hereinafter:  Collier]; but cf. infra note 5.  We are persuaded,                         _______   ___ ___ _____          nevertheless, by Rubbermaid's contention that R-H failed to carry          its  burden of  proof in  opposition to  Rubbermaid's motion  for          summary judgment.                    In  order to prevail, R-H ultimately must establish, by          a preponderance  of  the evidence,  each essential  element of  a                                        ____________________               2Several  of Rubbermaid's  arguments are  beside  the point.          First,  although Rubbermaid did  not receive a  direct "transfer"          from R-H, a "transfer" to  Caldor "for the benefit of" Rubbermaid          would be recoverable from either Rubbermaid or Caldor.  See Bank-                                    ______            __          ___          ruptcy Code   550,  11 U.S.C.   550(a) (trustee  may recover from          "the  initial transferee" or  from "the entity  for whose benefit          the transfer was made"); Travelers Ins. Co. v. Cambridge Meridian                                   __________________    __________________          Group, Inc.  (In re Erin Food  Servs., Inc.), 980 F.2d  792, 797,          ___________   _____________________________          797 n.8 (1st Cir. 1992).               Second, Rubbermaid places great stock in the fact that these          ASP transactions  produced a  "wash" on  R-H's books,  suggesting          that the ASP credits resulted  in no diminution of the hypotheti-          cal  chapter 7  estate.   Were  this the  standard, however,  few          transfers  would ever contravene   547(b).  Instead, the   547(b)          focus is  on the ultimate effect of the  transfer.  By their very          nature,  most preferential  transfers result in  a "wash"  on the          debtor's books,  since the preferred transferee  receives payment          on  account  of an  antecedent  debt  and its  allowable  "claim"          against the chapter 7 estate is reduced accordingly.               Finally, arguably no  "unjust" enrichment would  result were          R-H to recover  from Rubbermaid.  If Rubbermaid  were required to          disgorge, it could  file a proof of  claim for the amount  of the          avoided transfer, id.    502(h),  502(d), which would be entitled                            ___          to a pro rata distribution from the R-H debtor estate.               ___ ____                                          7          voidable  preference under section  547(b).  See  Bankruptcy Code                                                       ___             547(g), 1107(a),  11 U.S.C.   547(g), 1107(a);  Travelers Ins.                                                             ______________          Co. v.  Cambridge Meridian Group,  Inc. (In re Erin  Food Servs.,          ___     _______________________________  ________________________          Inc.),  980 F.2d  792, 799  (1st  Cir. 1992).    Once the  movant          ____          presents sufficient competent  evidence to entitle it  to summary          judgment as a matter of law, the nonmovant cannot rest merely  on          the averments  and denials in  its pleadings, but must  set forth          specific facts demonstrating a genuine issue for trial.  See Fed.                                                                   ___          R. Bankr. P.  7056; Fed. R.  Civ. P. 56(c),  (e); Germain v.  RFE                                                            _______     ___          Inv.  Partners IV  (In re  Wescorp, Inc.),  148 B.R.  161, 162-63          _________________   ____________________          (Bankr.  D.  Conn. 1992);  see  also  Marshack  v. Sauer  (In  re                                     ___  ____  ________     _____   ______          Palmer), 140 B.R.  765, 768 (Bankr. C.D.  Cal. 1992).  As  to any          ______          essential  factual element of  its claim  on which  the nonmovant          would  bear the  burden of proof  at trial,  its failure  to come          forward  with sufficient evidence to generate a trialworthy issue          warrants summary judgment  for the moving party.   See Christians                                                             ___ __________          v. Crystal Evang. Free  Church (In re  Young), 148 B.R. 886,  889             ___________________________  ____________          (Bankr. D. Minn. 1992) (citing Celotex Corp. v. Catrett, 477 U.S.                                         _____________    _______          317, 322 (1986)).                    At  trial, R-H would bear the  burden of proving, inter                                                                      _____          alia, that the challenged ASP  credits effected a "transfer of an          ____          interest of the debtor in  property."  Bankruptcy Code    547(b),          11 U.S.C.   547(b).  See also Bankruptcy Code   547(e), 11 U.S.C.                               ___ ____             547(e)  ("[A] [preferential]  transfer is  not made  until the          debtor has acquired  rights in the property [transferred].").   A          prepetition debtor  acquires  "rights" in  property  for  section                                          8          547(b) purposes if, but for the challenged transfer, its interest                          __  ___ ___          would have been "property of the estate" under section 541 at the          filing of  a chapter 7 petition.   See Begier v. Internal Revenue                                             ___ ______    ________________          Serv., 496 U.S. 53, 58, 58 n.3 (1990).          _____                    Accordingly, at  the  summary judgment  stage, R-H  was          required   to  come   forward   with  competent   evidence  that,          immediately prior  to its  "transfer" of these  ASP credits,  its          hypothetical  chapter 7 estate  owned an account  receivable from          Caldor  equal  to  the  total  unpaid  price  of  the merchandise                                  _____          _____          previously sold to  Caldor, and not merely in the  net amount due                                      ___ ___                ___ ______          R-H after deducting  Caldor's ASP credit from the  total price of          the merchandise.   Unless the hypothetical  R-H chapter 7  estate          would have  acquired the contract  right to compel Caldor  to pay          the full $453,000, with no offsetting ASP credit, the property of          the hypothetical R-H estate could  not have been diminished.  Id.                                                                        ___          ("[I]f the  debtor transfers  property that would  not have  been          available  for  distribution  to his  creditors  in  a bankruptcy          proceeding,   the  policy  behind  the  avoidance  power  is  not          implicated.").                    What constitutes  "property,"  within  the  meaning  of          Bankruptcy Code    541, is  a question of  federal law,  see Koch                                                                   ___ ____          Ref. v. Farmers Union Cent. Exch., Inc., 831 F.2d 1339, 1343 (7th          ____    _______________________________          Cir. 1987) (citing  H.R. Rep. No. 595, at  367-68), cert. denied,                                                              _____ ______          485 U.S. 906  (1988), and it is well established  that a debtor's          contractual right to recover an account receivable is property of          the chapter 7  estate, see Crysen/Montenay Energy  Co. v. Esselen                                 ___ ___________________________    _______                                          9          Assocs., Inc. (In re Crysen/Montenay  Energy Co.), 902 F.2d 1098,          _____________  _________________________________          1101 (2d Cir. 1990) (citing In  re Chauteguay Corp., 78 B.R. 713,                                      _______________________          725 (Bankr. S.D.N.Y.  1987)); Glenshaw Glass Co. v. Ontario Grape                                        __________________    _____________          Growers Mktg. Bd. (In re Keystone Foods, Inc.), 145 B.R. 502, 508          _________________  __________________________          (Bankr. W.D. Pa. 1992).  On the other hand, the nature and extent          of the debtor's enforceable "interest" or  "rights" in an account          receivable are defined  by state  law    in  this case, by  state                                     _____          contract law.  See, e.g.,  Griffel v. Murphy (In re Wegner),  839          ________       ___  ____   _______    ______  ____________          F.2d 533, 538-39 (9th Cir. 1988) (under Montana law, prior mutual          rescission of executory  contract divested debtor of  "rights" in          cattle); see also Glinka v. Bank of Vermont (In re Kelton Motors,                   ___ ____ ______    _______________  ____________________          Inc.),  153 B.R.  417, 419  (D. Vt.  1993)  (because    547(b) is          ____          silent,  courts  must  "look  to  state  law" for  definition  of          "interest" in property);  see generally Collier   547.03, at 547-                                    ___ _________ _______          22.1.                    Here, R-H alleged a "transfer."  Rubbermaid, the movant          at   summary  judgment,   presented  competent   extracontractual          evidence that the contract between R-H and Caldor gave rise to an          account receivable only in the net amount of  the unpaid price of                             ____        ___ ______          the  merchandise less  Caldor's  ASP credits.    Indeed, even  on                           ____          appeal R-H readily  concedes that it invariably  honored Caldor's          ASP credits from  the inception of the ASP  arrangement in 1987.3          The  deposition testimony revealed  that Caldor, like  many other                                        ____________________               3As  further  confirmation  of the  parties'  understanding,          their prepetition settlement agreement of Caldor's debt to R-H in          September 1989 reflects a deduction  for all ASP credits then due          Caldor.                                          10          trade  retailers, routinely asserted  this sort of  "charge back"          for manufacturers other than Rubbermaid.                    Under  state  law,4   R-H's  contract  rights   against          Caldor, if  indefinitely expressed  in their  contract, would  be          informed by their prior course of dealing, course of performance,          or usage of  trade.  See  Mass. Gen. L.  ch. 106,   2-202  (1990)                               ___          (providing  that parol  evidence of  prior  course of  dealing or          usage of trade  is  admissible to explain  or supplement contract          terms);  id.   1-205(1)  (defining  "course  of  dealing"  as  "a                   ___          sequence of previous conduct between  the parties to a particular          transaction  which is  fairly  to be  regarded as  establishing a          common basis of understanding for interpreting  their expressions          and other conduct"); id.    1-205(3); id.   2-208(1) ("Where  the                               ___              ___          contract  for sale involves repeated occasions for performance by          either party with knowledge of  the nature of the performance and          opportunity  for objection  to it  by  the other,  any course  of          performance accepted and acquiesced in without objection shall be          relevant  to determine  the  meaning  of  the  agreement.");  id.                                                                        ___            1-205(2) (defining "usage  of trade" as any  practice or method          of  dealing having  such  regularity of  observance  in a  place,          vocation or  trade as to justify  an expectation that it  will be                                        ____________________               4We assume for present purposes that Massachusetts law would          apply to the contract for the  sale of goods between R-H, a  Mas-          sachusetts corporation, and  Caldor.   The Massachusetts  Uniform          Commercial  Code,  on  "course of  performance  and  dealing" and          "usage  of trade" evidence,  substantially conforms with  that in          other states.                                          11          observed with respect to the transaction in question").5                    Bypassing  these  procedural  concerns,  R-H  urges  on          appeal that  "[w]hether an  account receivable  from Caldor  ever          existed on the  Debtors [sic] books is a [question] of fact which          should   be  determined  by  the  Bankruptcy  Court  on  remand."          However,  once  Rubbermaid  came  forward  with  its   undisputed          evidence  of prior course  of dealing, performance,  and usage of          trade, R-H was left with the  laboring oar.  As the nonmovant  at          summary judgment, R-H had the burden to establish that its agree-          ment with  Caldor contained  an express  contract term  which (i)               ____  ______               _______          would  have precluded resort to such extracontractual evidence in          interpreting the contractual rights of the parties, or (ii) would          at least have  given rise to a trialworthy  factual issue bearing          on the proper  interpretation of their contract.   See Mass. Gen.                                                             ___          L. ch.  106,   1-205(4)  (1990) (express  contract terms  "trump"          inconsistent "course  of dealing"  evidence); see  also Lancaster                                                        ___  ____ _________                                        ____________________               5In many  respects, this is  precisely the type  of evidence          which  would  be  needed to  establish  Rubbermaid's    547(c)(2)          defense  to   preference  avoidance  for  payments  made  in  the          _______          "ordinary  course of  [the  debtor's]  business."    See  Collier                                                               ___  _______            547.01, at  547-13  n.20 (noting  that,  though state  of  mind          generally is immaterial to overall   547 analysis, intent "may be          _________          a  dispositive  factor  in  determining  certain  elements  of  a          preference . . . .").  But because this "transfer" involves R-H's          alleged "release" of a preexisting obligation  by Caldor, and R-H          has  the threshold  burden to  establish  all essential    547(b)                                                    ___          elements  before the burden  shifts to Rubbermaid  to establish a            547(c) defense to  avoidance, the burden  remained with R-H  to                   _______          establish  a contract  right to  recover  the full  price of  the                                                        ____          merchandise with no offsets for Caldor's ASP credits.                                          12          GlassCorp. v. PhilipsECG, Inc., 835F.2d 652, 659(6th Cir. 1987).6          __________    ________________                    The record does not disclose the relevant terms  of the          Caldor - R-H agreement nor  is there documentation from which its          terms might reasonably be inferred.7   Moreover, there is no evi-          dence that  Rubbermaid accelerated its recourse to the ASP credit          arrangement in anticipation of  R-H's chapter 11 petition,  as by          inducing Caldor  to increase the  amount or frequency of  its ASP          credits over previous  levels.8  Consequently, given  its failure          to confront  Rubbermaid's evidence  of prior  course of  dealing,          performance,  and usage of trade, R-H demonstrated no trialworthy          dispute that it had any cognizable "interest" in the $453,000 ASP          credit  which would  have become  property of  the estate  in the                                        ____________________               6Similarly,  R-H did not generate a  trialworthy issue as to          whether the ASP credits could have replaced the "released" Caldor          accounts receivable as  R-H "assets," since the  hypothetical R-H          chapter 7  estate could never  have required Rubbermaid  to honor          the ASP credits by paying the R-H estate $453,000 in cash.  Under          the  contract between  Rubbermaid and R-H,  as informed  by prior          course of dealing, any ASP credits held by R-H could be used only                                                                       ____          to reduce R-H's accounts payable to Rubbermaid.               7R-H's  Exhibit  H  is merely  a  redacted  transcription of          certain  relevant book  entries, prepared  solely for  litigation          purposes,  hence  not probative  of  the terms  of  the agreement          between R-H and Caldor.  Similarly, although a former R-H officer          testified that  R-H  could have  refused to  accept Caldor's  ASP          credits at any  time, he identified no contractual  basis for the          supposed right of refusal, nor  did he suggest that R-H  had ever          exercised such a right.               8Nowhere does R-H suggest or show that Caldor's  ASP credits          exceeded the  authorized 1989  fixed percentage  rate (13.75%  of          total 1989 merchandise  sales to Caldor), or that  the 1989 level          differed  significantly  from   the  authorized  fixed-percentage          rates, or ASP credits claimed, in 1987 or 1988.                                          13          event of a chapter 7 liquidation.9                                         III                                         III                                      CONCLUSION                                      CONCLUSION                                      __________                    We hold  that R-H did not establish a trialworthy issue          as to  whether a section  547(b) "transfer" occurred, as  was its          burden under Fed.  R. Bankr. P. 7056  and Fed. R. Civ.  P. 56(c),          (e).  Thus, we need take  no position on the voidability of  duly          established  ASP  credit transactions  as  preferential transfers          under section 547(b).10                                         ____________________               9R-H's Rule  7056 proffer  was seriously  deficient on  more          than one  front.  The  90-day preference period extended  back to          July 19,  1989.   But  the  evidence  shows that  Caldor  claimed          $294,000 of  the  $453,000 in  ASP credits  by assessing  "charge          backs" against R-H  on June 25, 1989.  Since  R-H's acceptance of                                 ____ __  ____          these  "charge  backs" constituted  the  alleged "transfer,"  R-H          arguably did not meet its  burden of proving that these transfers          of $294,000 in ASP credits fell  within the applicable preference          period under   547(b)(4)(A) (transfer "made . . . on or within 90          days before the date of the filing of the petition").               10The  bankruptcy   court  premised  its  decision   on  the          equitable doctrine of recoupment, see  supra note 1, citing In re                                            ___  _____                _____          B & L Oil Co., 782 F.2d 155 (10th Cir. 1986).   Where a chapter 7          _____________          estate  and its  creditor hold  "counterclaims" arising out  of a          contractual "transaction" which bridges the date of the chapter 7          petition, it is  often deemed inequitable to allow  the estate to          recover  its postpetition claim in full  from the creditor, while                                          __ ____          the  same creditor  is allowed  only a  pro rata dividend  on its                                                  ___ ____          prepetition  claim against  the estate.    Recoupment allows  the          creditor to abate  its payment  to the  chapter 7  estate by  the          amount of its prepetition claim.  Since we rely on other grounds,          we need not address the problematic application of the recoupment          theory  in this  case.    See Electronic  Metal  Prods., Inc.  v.                                    ___ _______________________________          Honeywell, Inc.,  95 B.R.  768, 770  (D. Colo.  1989) (recoupment          _______________          must  be narrowly  construed as  a  preference defense);  compare                                                                    _______          Raleigh v. Mid American Nat'l Bank & Trust  Co. (In re Stoecker),          _______    ____________________________________  ______________          131  B.R. 979,  983 (Bankr.  N.D.  Ill. 1991)  (recoupment not  a          viable defense on merits of  preference avoidance action as it is          not  an enumerated  defense in     547(c)(1)-(7)), with  Visiting                                                             ____  ________          Nurse Ass'n of Tampa Bay, Inc.  v. Sullivan (In re Visiting Nurse          ______________________________     ________  ____________________                                          14                    Affirmed; cost to appellees.                    Affirmed; cost to appellees.                    ________  _________________                                        ____________________          Assoc.  of Tampa Bay, Inc.),  121 B.R. 114,  121 n.4 (Bankr. M.D.          __________________________          Fla.  1990) (recoupment "well  recognized" defense  to preference          avoidance).                                          15