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December 26, 2012
Cellmark Paper, Inc., Appellant v. Ames Merchandising Corporation, Appellee
United States Court of Appeals for the Second Circuit
In this appeal, Creditor-Appellant Cellmark Paper Inc. (“Cellmark”), appeals from a February 28, 2012 order of the United States District Court for the Southern District of New York (Koeltl, J.) affirming the March 28, 2011 order of the United States Bankruptcy Court for the Southern District of New 10 York (Gerber, Bankr. J.), which avoided and recovered three transfers between it and Debtor-Appellee Ames Merchandising Corporation (“Ames”) worth a total of $1,899,970.73.
In its decision, the Second Circuit, by Summary Order unanimously affirmed the order of the district court. The panel found that Cellmark did not meet its burden to introduce evidence that the debtor was not insolvent and found that the book value of Ames and “statements by Ames executives about their expectations for the company once it exited Chapter 11 bankruptcy” was insufficient as such evidence. The Second Circuit found Cellmark’s arguments to be without merit and ruled that Judge Gerber’s findings and conclusions were not erroneous or an abuse of his discretion. The panel also affirmed the bankruptcy court’s reasoning on the rejection of Cellmark’s ordinary course defense, request to present additional evidence and motion for a new trial and upheld the decision of the district court.download decision