As the newest associate at a glamorous, big-city bankruptcy firm, you have been assigned the Wooden Industries bankruptcy. Wooden filed under Chapter 11 of the Bankruptcy Code on September 1. On December 30, the case was converted to Chapter 7 and a partner in your firm was appointed trustee. Bankr. Code 348(a). He asks you to review the following transactions for possible avoidance as preferences:

a.On August 15, Wooden borrowed $300,000 from Firstbank. Wooden executed the loan documents that day. They included a security agreement covering certain equipment owned by Wooden. Firstbank filed a financing statement the following morning. Bankr. Code 547(b), (c)(1), and (e).

b.On February 7, Wooden borrowed $300,000 from Secondbank on an unsecured one-year note. On July 11, Wooden signed a security agreement that granted Secondbank a security interest in certain equipment. Secondbank immediately perfected the security interest by filing a financing statement. Bankr. Code 547(b), (c), and (e).

c.On February 7, Wooden borrowed $300,000 from Thirdbank on a secured one-year note. Thirdbank attempted to file a financing statement, but it was lost in the mail. Five months later, a Postal Service employee found the envelope stuck to the inside of a mail sack by a piece of carelessly tossed chewing gum. On July 11, the UCC filing office received the still-sticky envelope and accepted the filing. Bankr. Code 547(e); UCC 9-317(a)(2).

d.On July 10, Wooden purchased network software and hardware from the Electronic Machine Shop (EMS). Wooden financed the purchase with a $30,000 loan from Fourthbank. Wooden signed a promissory note for the $30,000 and a security agreement granting Fourthbank a security interest in the network. Fourthbank issued the $30,000 check to EMS on July 10. EMS delivered the network to Wooden the following day. Fourthbank mailed a financing statement to the office of the secretary of state, where it was received and accepted for filing on August 4. UCC 9-103(a) and (b)(1), 9-317(e); Bankr. Code 547(c)(1), (c)(3), and (e).

e.Would the result be different if, on the facts of d, Fourthbank had issued the check to Wooden and Wooden had used other funds to purchase the network?

f.On March 9, Wooden did not have the money to make its payroll. It solved the problem by borrowing $300,000 that day from Elsa Cohen, the wife of Wooden CEO, president, and 30 percent shareholder, Michael Cohen. Mike promised Elsa that the loan would be secured, but he didn't get the papers over to her for signing until April 12. The financing statement was filed on the afternoon of April 12. Elsa has never been involved in the management of Wooden. Bankr. Code 547(b)(4), (e), and 101 (definitions of "insider" and "relative"). What do you advise?