Abstract
Section 547 of the Bankruptcy Code was intended to level the playing field so that one creditor is not more favored than another. It was also designed to encourage creditors to continue to sell on credit to a buyer slipping into bankruptcy and perhaps prevent the bankruptcy altogether. Preferential payments are not recoverable by the trustee as long as the payment was made in the ordinary course of business, was made contemporaneously with the delivery or was followed by subsequent shipments or services. In a court that allows the defense with unpaid and paid new value, the exposure is reduced to $20,000, but in the "must remain unpaid" court, the exposure is double because none of the new value that was paid for during the 90-day period is eligible for the defense. This article looks at the current status of the "new value" defense, especially in Millert v. JNJ Logistics LLC, then briefly examines the split that still remains among the various circuit courts of appeals.