This case concerns the bankruptcy estate of Qualia Clinical Service, Inc. (“Qualia”). The estate’s Chapter 7 Trustee (“Trustee”) seeks to avoid as a preferential transfer a security interest recorded by one of Qualia’s creditors shortly before the bankruptcy petition. The bankruptcy court and the Bankruptcy Appellate Panel of this court (“BAP”) held the security interest avoidable.
The Court of Appeals held that the bankruptcy court and BAP properly held a security interest held by creditor Inova was avoidable; both courts properly applied Bankruptcy Code Section 547(c)(5)(A) to conclude that the preferential transfer in the case, though it concerned an interest in accounts receivable, improved Inova’s position as against debtor’s other creditors and so was not exempt from avoidance.
Affirmed.
