Page:United States Reports 502 OCT. TERM 1991.pdf/313

 502us1$13Z 08-21-96 15:26:37 PAGES OPINPGT

Cite as: 502 U. S. 151 (1991)

155

Opinion of the Court

preference are that it (1) benefit a creditor; (2) be on account of antecedent debt; (3) be made while the debtor was insolvent; (4) be made within 90 days before bankruptcy; and (5) enable the creditor to receive a larger share of the estate than if the transfer had not been made. Section 547 also provides that the debtor is presumed to have been insolvent during the 90-day period preceding bankruptcy. § 547(f). In this case, it is undisputed that all five of the foregoing conditions were satisfied and that the interest and loan commitment fee payments were voidable preferences unless excepted by subsection (c)(2). The most significant feature of subsection (c)(2) that is relevant to this case is the absence of any language distinguishing between long-term debt and short-term debt.7 That subsection provides: “The trustee may not avoid under this section a transfer— . . . . . “(2) to the extent that such transfer was— “(A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee; “(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and “(C) made according to ordinary business terms.” Instead of focusing on the term of the debt for which the transfer was made, subsection (c)(2) focuses on whether the debt was incurred, and payment made, in the “ordinary course of business or financial affairs” of the debtor and transferee. Thus, the text provides no support for respondent’s contention that § 547(c)(2)’s coverage is limited to shortterm debt, such as commercial paper or trade debt. Given 7

Nor does the definitional section of the Bankruptcy Code, which defines the term “debt” broadly as a “liability on a claim,” 11 U. S. C. § 101(11), distinguish between short-term debt and long-term debt.