## Facts

- An individual debtor filed for bankruptcy relief.
- A dispute arose over a prepetition transaction affecting the debtor’s property and whether it constituted a preferential transfer avoidable under 11 U.S.C. § 547.
- The controversy centered on when the relevant “transfer” was deemed to occur for preference analysis, particularly in relation to perfection or recording under state law.
- The bankruptcy court rejected the debtor’s preference theory and ruled the challenged transfer was not avoidable.
- The district court affirmed the bankruptcy court’s ruling.
- The debtor appealed to the United States Court of Appeals for the Ninth Circuit.

## Issues

1. For purposes of 11 U.S.C. § 547, when did the relevant “transfer” occur: at the time of the parties’ underlying transaction or at the time the creditor’s interest was perfected/recorded under state law as implemented by § 547(e)?
2. Under the correct timing rule, did the transfer fall within the 90-day preference period and satisfy the requirements for avoidance under § 547(b)?

## Decision

- The Ninth Circuit affirmed the district court’s judgment affirming the bankruptcy court.
- The court held that § 547(e) governs the timing of the transfer for preference purposes.
- The transfer was deemed made when the creditor’s interest became perfected such that a hypothetical judicial lien creditor could not obtain priority.
- Applying that timing rule, the challenged transfer was not avoidable as a preference on the debtor’s theory.

## Legal Principles

- For preference analysis, the time a transfer is “made” is determined by 11 U.S.C. § 547(e), which ties transfer timing to perfection and priority concepts.
- A transfer of an interest in property is treated as made when it is perfected so that a hypothetical judicial lien creditor cannot acquire a superior interest.
- Bankruptcy preference timing rules coordinate with state law perfection and recording requirements; courts apply state-law priority/perfection concepts through § 547(e) rather than alternative judicial timing rules.
- Once the transfer date is fixed under § 547(e), the 90-day lookback period in § 547(b)(4)(A) is applied to determine avoidability.

## Conclusion

The Ninth Circuit held that § 547(e)’s perfection-based timing controls when a transfer occurs for preference purposes and, under that framework, affirmed that the disputed transfer was not avoidable as a preferential transfer.


In re Ehring, 900 F.2d 184 (9th Cir. 1990)