IN THE MATTER OF: FREEDOM GROUP, INCORPORATED, doing business as METRO METALS, Debtor. FREEDOM GROUP, INCORPORATED, Plaintiff-Appellant, v. LAPHAM-HICKEY STEEL CORPORATION, Defendant-Appellee., 50 F.3d 408


Summary

The creditor obtained a judgment plus interest and costs against the bankrupt in an Indiana state court. The state court issued a notice of garnishment and then entered a final order of attachment, directing the bankrupt's bank to pay any and all money in the bankrupt's account up to the limit of the judgment. The bank issued the check within 90 days of when the bankrupt declared bankruptcy, however the original garnishment order fell outside the 90 days. The bankrupt filed an adversary proceeding against the creditor, alleging that the transfer was avoidable under 11 U.S.C.S. § 547(b). The bankruptcy judge agreed, but the district court reversed and allowed the transfer to stand. On appeal the court reversed, holding that although the notice of garnishment created a property interest in the bank account, the funds themselves were not transferred to the creditor. They were merely frozen until the final order of attachment was issued and complied with. Because the transfer did not occur...