9th Circuit Bankruptcy Appellate Decision – In re: Bay Area Glass, Inc.

Creditor Western States Glass Corp. of Northern California (“Western”) appeals the decision of the bankruptcy court disallowing its secured claim under § 502(d)2 because its judgment lien constituted an avoidable preference under Section 547(b) of the Bankruptcy Code.

The bankruptcy court did not err in its interpretation of Bankruptcy Code Section 547(c)(9) or in determining that the transfer by which Western gained its lien was avoidable by Trustee. As a result, the bankruptcy court correctly disallowed Western’s secured claim under Section 502(d) of the Bankruptcy Code.

Because Section 547(c)(9) of the Bankruptcy Code does not create an exception to avoidance under these facts, the Bankruptcy Appellate Panel Affirmed.