                      RECOMMENDED FOR FULL-TEXT PUBLICATION
                           Pursuant to Sixth Circuit Rule 206
                                  File Name: 09a0145p.06

               UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                 _________________


                                               X
                                                -
 In re: SHARRENE WELLS,
                                                -
                                Debtor.
 ____________________________________           -
                                                -
                                                    No. 08-1381

                                                ,
                                                 >
                                                -
 MBNA AMERICA BANK, N.A., part of Bank

                                  Appellant, -
 of America Corporation,
                                                -
                                                -
                                                -
                                                -
           v.

                                                -
                                   Appellee. -
 MARCIA R. MEOLI, Trustee,
                                                -
                                               N
          Appeal from the Bankruptcy Appellate Panel of the Sixth Circuit.
               No. 06-80634—Jeffrey R. Hughes, Bankruptcy Judge.
                               Argued: December 5, 2008
                           Decided and Filed: April 10, 2009
                 Before: RYAN, SILER, and GRIFFIN, Circuit Judges.

                                   _________________

                                       COUNSEL
ARGUED: Lawrence Gary Reinhold, WEINSTEIN & RILEY, Huntington Woods,
Michigan, for Appellant. Marcia R. Meoli, HANN, PERSINGER, P.C., Holland, Michigan,
for Appellee. ON BRIEF: Lawrence Gary Reinhold, WEINSTEIN & RILEY, Huntington
Woods, Michigan, for Appellant. Marcia R. Meoli, HANN, PERSINGER, P.C., Holland,
Michigan, for Appellee.
                                   _________________
                                       OPINION
                                   _________________
        RYAN, Circuit Judge. This appeal comes to this court from the Bankruptcy
Appellate Panel’s affirmance of the bankruptcy court’s decision to grant summary judgment
in favor of the bankruptcy trustee Meoli. The issue this case presents is whether two $5,000
“convenience checks” paid from the debtor’s Chase Bank account to offset the balance on


                                             1
No. 08-1381          In re Wells                                                      Page 2


her MBNA credit card account shortly before filing for bankruptcy are preferential transfers
within the meaning 11 U.S.C. § 547(b). We conclude that they are avoidable preferential
transfers and we affirm the bankruptcy court’s decision.

                                               I.

         In the 90-day period preceding her petition for bankruptcy protection, the debtor,
Sharrene Wells, wrote two convenience checks from her Chase Bank, USA, N.A. account
against the debt on her MBNA credit card account. Chase Bank offered these checks and
advertised that they could be used to “[t]ransfer balances, pay bills, make a purchase, [or]
get extra cash.”     The convenience checks were made payable through First USA
Management Services, Inc.

         On October 14, 2005, Wells filed her petition for relief under Chapter 7 of the
Bankruptcy Code. On August 25, 2006, the trustee commenced an adversary proceeding
against MBNA to avoid and recover, among other transfers, the amount of the two $5,000
convenience checks Wells wrote from her Chase Bank account to her MBNA account. The
trustee filed a motion for summary judgment arguing that these were preferential transfers
within the provisions of § 547(b). The bankruptcy court granted the trustee’s motion and on
April 19, 2007, entered a judgment against MBNA in the amount of $10,816.00, which
included other transfers that are not at issue in this appeal.

         MBNA then appealed the bankruptcy court’s judgment to the Bankruptcy Appellate
Panel which in turn affirmed the bankruptcy court’s decision. MBNA now appeals to this
court.

                                              II.

         On appeal from a bankruptcy court’s decision granting summary judgment, we
review the bankruptcy court’s factual findings for clear error and its legal conclusions de
novo. In re Cannon, 277 F.3d 838, 849 (6th Cir. 2002). Summary judgment is appropriate
when the pleadings, the discovery and disclosure materials and affidavits show that there are
no genuine issues of material fact and that the moving party is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
No. 08-1381          In re Wells                                                          Page 3


        The section of the Bankruptcy Code that grants a bankruptcy trustee the authority
to initiate proceedings seeking to set aside preferential transfers is 11 U.S.C. § 547(b).
Specifically, § 547(b) states:

               Except as provided in subsection (c) of this section, the trustee may
        avoid any transfer of an interest of the debtor in property–
                       (1)      to or for the benefit of a creditor;
                       (2)      for or on account of an antecedent debt owed by the
               debtor before such transfer was made;
                       (3)      made while the debtor was insolvent;
                       (4)      made–
                                (A)      on or within 90 days before the date of the
                       filing of the petition; or
                                (B)      between ninety days and one year before the
                       date of the filing of the petition, if such creditor at the time
                       of such transfer was an insider; and
                       (5)      that enables such creditor to receive more than such
               creditor would receive if–
                                (A) the case were a case under chapter 7 of this title;
                                (B) the transfer had not been made; and
                                (C) such creditor received payment of such debt to
                       the extent provided by the provisions of this title.

11 U.S.C. § 547(b) (Westlaw 2007).

        Since this case was started prior to the effective date of the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, all references to the Bankruptcy Code are
to the version in effect prior to these revisions. See BAPCPA, § 1501(b)(1), Pub. L.
No.109-8, 119 Stat. 23.

        Neither party disputes that the five elements enumerated in § 547(b)(1)-(5) are
satisfied, and Wells does not contend that any exception provided by § 547(c) applies. The
only question is whether the two $5,000 convenience checks effected transfers of the
debtor’s interest in property.

                                              III.

        The answer seems self-evident, but apparently it is not. The leading case resolving
the question whether convenience checks constitute the transfer of the drawer’s interest in
her property is McLemore v. Third National Bank (In re Montgomery), 983 F.2d 1389 (6th
Cir. 1993). There, a panel of this court explained that cash equivalents, like credits in a bank
No. 08-1381         In re Wells                                                       Page 4


account, may constitute property of the bankrupt estate. Id. at 1393-94. The court also
explained that the degree of control a debtor exercises over the property transferred is the
principal determinant of whether the debtor has “‘an interest’” in the property such that its
transfer may be avoided under § 547(b). Id. at 1395 (citation omitted); see also In re
Dilworth, No. 08-3389, 2009 WL 790902 (6th Cir. Mar. 27, 2009).

        Wells was free to use the convenience checks for any reason she chose, including
paying down her credit card balance with MBNA. In making her decision to do just that and
then drawing the checks on her Chase Bank credit card account, Wells exercised complete
control over the funds drawn, in which she had an ownership interest.

        Contrary to MBNA’s contention, this is not a case of “earmarking” which has been
recognized as an equitable exception to the avoidance rule for preferential transfers, where
the borrowed funds used to discharge the debt are specifically earmarked by the lender for
payment to a designated creditor. See Mandross v. Peoples Banking Co. (In re Hartley), 825
F.2d 1067, 1069 (6th Cir. 1987). Here, the funds were not restricted by Chase to be paid
solely to MBNA to be credited against Wells’s credit card debt. The checks could have been
used to “[t]ransfer balances, pay bills, make a purchase, [or] get extra cash.” In such an
instance, the debtor possessed sufficient control over the funds to determine where they
would go once the credit was accessed.

                                            IV.

        For these reasons, we AFFIRM the bankruptcy court’s decision.
