## Facts

- Terry B. McConnell filed a Chapter 7 case on March 8, 2011.
- McConnell owned a 1972 Piper Cherokee aircraft.
- In 2003, McConnell and David E. Murphy formed a partnership arrangement for maintaining and operating the aircraft.
- From 2006 through 2009, Murphy paid a greater share of partnership expenses than McConnell.
- In December 2009, McConnell agreed to repay Murphy and signed a UCC-1 financing statement purporting to grant Murphy (and “Big Dog Aircraft, Inc.”) a security interest in the aircraft; the UCC-1 was filed in Houston County Superior Court, Georgia.
- “Big Dog Aircraft, Inc.” had no separate corporate existence and functioned as Murphy’s trade name.
- On September 15, 2010, Murphy demanded payment, dissolution of the partnership, or surrender of the aircraft.
- On September 15, 2010, McConnell executed an aircraft bill of sale conveying the aircraft to “Big Dog” in full satisfaction of the debt.
- The bill of sale was filed with the Federal Aviation Administration on January 11, 2011.
- The Chapter 7 trustee sued to avoid the aircraft transfer as a preferential transfer under 11 U.S.C. § 547(b) and moved for summary judgment.

## Issues

1. Whether the aircraft conveyance was an avoidable preferential transfer under 11 U.S.C. § 547(b).
2. For preference timing purposes, whether the transfer was “made” when the bill of sale was filed with the FAA (perfection) rather than when the debtor signed it.
3. Whether the trustee was entitled to summary judgment on the § 547(b) elements based on undisputed facts.

## Decision

- The court granted the trustee partial summary judgment.
- The court found no genuine dispute that § 547(b)(1)–(4) were satisfied: the transfer was to/for a creditor, on account of antecedent debt, made while the debtor was presumed insolvent, and made within 90 days of the petition date.
- The court treated the relevant transfer date as January 11, 2011, when the bill of sale was filed with the FAA, because aircraft interests are perfected through FAA recording rather than state UCC filing.
- The court left unresolved remaining matters, including § 547(b)(5) and any defenses under § 547(c), for further proceedings.

## Legal Principles

- A trustee may avoid a transfer as preferential under 11 U.S.C. § 547(b) if the statutory elements are met, including transfer timing within the 90-day period and insolvency (presumed during that period).
- Under § 547(e), the time a transfer is “made” depends on when it is perfected; perfection rules control preference timing.
- Interests in aircraft are perfected by recording with the FAA; state-law UCC filings do not perfect aircraft interests against third parties for purposes of determining preference timing.
- Summary judgment is appropriate when there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.

## Conclusion

The court held on summary judgment that the debtor’s prepetition conveyance of an aircraft to satisfy an existing debt was a preferential transfer under § 547(b)(1)–(4) because perfection occurred upon FAA filing within 90 days of bankruptcy, while reserving remaining preference and defense issues for later determination.


In re McConnell, 455 B.R. 824 (Bankr. M.D. Ga. 2011)