Plaintiff-Appellant and Trustee Glen R. Anstine appeals from the judgment of the bankruptcy appellate panel (“BAP”). The BAP determined that Defendant-Appellee *1274 Carl Zeiss Meditec AG (“Creditor”) was not a “non-statutory insider” of Debtor U.S. Medical, Inc. (“Debtor”) for the purposes of 11 U.S.C. § 547(b)(4)(B). The BAP reversed the judgment of the bankruptcy court. The bankruptcy court held that Creditor was a non-statutory insider of Debtor under 11 U.S.C. § 101(31) and permitted Trustee to avoid $147,307 in transfers made between ninety days and one year before Debtor filed for Chapter 7 bankruptcy. See 11 U.S.C. § 547(b)(4)(B). Our jurisdiction arises under 28 U.S.C. § 158(d) and we affirm the judgment of the BAP.
Background
The facts upon which the bankruptcy court based its decision are not disputed. Debtor distributed new and used medical equipment through the Internet. Debtor entered into a distribution agreement with Creditor, a German producer of surgical equipment and aesthetic lasers, on June 13, 2000. Under that agreement, Debtor served as Creditor’s exclusive distributor in North America and Creditor became Debtor’s sole laser manufacturer. The agreement also provided that Creditor had the right to appoint a member of Debtor’s board of directors. Under a separate stock-purchase agreement, Creditor acquired a 10.6% equity interest in the company for $2 million in cash and a $2 million inventory-purchase credit. In addition, Creditor retained an unexercised warrant for 80,000 additional shares of Debtor. The distribution and stock-purchase agreements formed the basis of a “strategic alliance” between the companies.
Dr. Bernard Seitz, the CEO of Creditor, was appointed to Debtor’s board in accordance with the stock-purchase agreement. The stock-purchase agreement provided for the payment of a financial penalty by Debtor to Creditor if Dr. Seitz were removed from the board. Dr. Seitz received only a stock-option package in Debtor— which he never exercised — as compensation for his service. Dr. Seitz attended every board meeting, either in person or by phone. He had access to all of Debtor’s financial information but did not participate in any vote concerning payment to Creditor. All day-to-day business between Debtor and Creditor was handled by Creditor’s Chief Financial Officer Michael Det-tlebacher.
After experiencing financial difficulties, Debtor voluntarily filed for Chapter 7 bankruptcy on June 24, 2002. In an adversary proceeding, Trustee sought to avoid certain transfers made between ninety days and one year before the bankruptcy-petition date, claiming that Creditor was an “insider” under 11 U.S.C. § 547(b)(4)(B). Within this period, Creditor received sporadic payments and some inventory returns. Creditor lost its entire investment in Debtor and was owed approximately $1 million when the bankruptcy petition was filed. After a trial on March 7, 2006, the bankruptcy court held that Creditor was a “non-statutory insider” pursuant to 11 U.S.C. § 101(31) because of the “extreme closeness” between Debtor and Creditor. App. at 241, 248.
The bankruptcy court reached this conclusion even though it also specifically found no evidence that Dr. Seitz, as Creditor’s representative, controlled, sought to control, or exercised any undue influence on Debtor; rather, Dr. Seitz was sensitive to “potential conflicts of interest” and both Dr. Seitz and Debtor’s senior management “attended to the kinds of formalities one would expect to see in dealings between third parties at arm’s length.” Id. at 246-47. Likewise, the bankruptcy court found no evidence that Creditor’s 10% share of Debtor allowed Creditor to control or attempt to exercise any undue influence on Debtor. Id. at 247.
*1275 The bankruptcy court denied leave for an interlocutory appeal to the district court, the parties stipulated to a judgment of $147,307 in Trustee’s favor if Creditor were ultimately ruled to be a non-statutory insider, and Creditor preserved its right to appeal. The bankruptcy court entered its final judgment on August 7, 2006 after directing Trustee to file a motion pursuant to Fed. R. Bankr.P. 9019. Creditor then appealed to the BAP.
On appeal, the BAP reversed, ruling that “not every creditor-debtor relationship attended by a degree of personal interaction between the parties rises to the level of an insider relationship,”
id.
at 273 (quoting
In re Friedman,
Discussion
We independently review the decision of the bankruptcy court and not the decision of the BAP.
In re Kunz,
In general, bankruptcy law prohibits “preferential transfers.”
See Kunz,
One of the purposes of bankruptcy law is to provide fair remedies to creditors generally, and a corollary of this principle is to prevent, within limits, a debtor from giving preferred treatment to some creditors in derogation of the interests of other, similarly situated creditors. A debtor might be motivated to prefer one creditor or some creditors over his creditors generally for a number of reasons, including personal and business connections. The supervision of the bankruptcy court generally prevents unwarranted preferential treatment. But the law has long recognized and addressed the concern that a debtor could circumvent this policy by making preferential transfers before filing his bankruptcy petition.
Id.
Under 11 U.S.C. § 547(b), therefore, a bankruptcy trustee may avoid, or force a creditor to repay to the debtor’s estate, a transfer of an interest of the debtor in property if certain conditions are met.
1
See id.
at 1075-76;
In re A. Tarricone, Inc.,
The word “includes” is not limiting. Id. § 102(3). Therefore,
[cjourts have held that the use of the word “includes” in this section indicates that Congress did not intend for the categories listed to be exclusive. Instead, the categories are “illustrative rather than exhaustive.” Consequently, the authorities are in agreement that there are “two distinct types of insiders, [first] those entities specifically men- . tioned in the statute (‘relative,’ ‘partnership,’ ‘general partner,’ and ‘corporation’), i.e. per se insiders, or [second] those not listed in the statutory definition, but who have a ‘sufficiently close relationship with the debtor that ... conduct is made subject to closer scrutiny than those dealing at arm’s length with the debtor.’” Each of the two categories of insiders “is based on either one of two relational classifications. First, the Code assigns insider status to entities or relatives of the debtor, or of persons in control of a related entity, whose affinity or consanguinity gives rise to a conclusive presumption that the individual or entity commands preferential treatment by the debtor. Second, insider status may be based on a professional or business relationship with the debtor, in addition to the Code’s per se classifications, where such relationship compels the conclusion that the individual or entity has a relationship with the debtor, close enough to gain an advantage attributable simply to affinity rather than to the course of dealings between the parties."
Kunz,
Trustee primarily argues that the bankruptcy court was correct (and the BAP was wrong) because the closeness of a relationship between a creditor and a debt- or alone is enough to support a finding that a creditor is a non-statutory insider of a debtor pursuant to 11 U.S.C. § 101(31). Aplt. Br. at 12-13. A showing that the creditor exerted control or undue influence over the debtor or that the creditor en *1277 gaged in less-than-arm’s-length transactions with the debtor is not required. Id. Creditor responds that the bankruptcy court’s decision was incorrect because a trustee’s demonstration of a creditor’s control, undue influence, or transactions at less than arm’s length is essential for a finding that a creditor is a non-statutory insider of a debtor. Aplee. Br. at 12-13. A close relationship alone, Creditor contends, is not enough to confer insider status. Id.
Both parties agree that there is little case law on this issue.
Id.
at 12; Aplt. Br. at 12. The legislative history for the definition of “insider” states that “[a]n insider is one who has a sufficiently close relationship with the debtor that his conduct is made subject to closer scrutiny than those dealing at arms [sic] length with the debtor.” S.Rep. No. 95-989, at 25 (1978), 1978 U.S.Code Cong.
&
Admin.News 5787, 5810; H.R.Rep. No. 95-595, at 312 (1977);
see
Aplee. Br. at 14, 25. “In ascertaining insider status, then, courts have looked to the closeness of the relationship between the parties and to whether any transactions between them were conducted at arm’s length.”
4
In re Krehl,
We considered non-statutory-insider status in
Kunz,
and that case might plausibly be read to suggest that a close relationship alone (or at least a close relationship with some potential to gain advantage based on affinity) is enough for a court to hold that a creditor is a non-statutory insider of a debtor.
See
The case law that has developed [ ] indicates that not every creditor-debtor relationship attended by a degree of personal interaction between the parties rises to the level of an insider relation *1278 ship. A common basis for these rulings was the perception that, while a creditor may be in a strong bargaining position in dealing with the debtor, so long as the parties transact their business at arm’s length, such circumstances do not necessarily give rise to insider status even though there was some degree of personal relationship with the debtor. It is unlikely that Congress intended that complex business relationships existing over a period of time, attended by some personal involvement but without control by the creditor over the debtor’s business, would subject such creditor to insider status.
Friedman,
On closer review,
Kunz
requires that the relationship between a debtor and a non-statutory insider be not only close, but also at less than arm’s length.
See id. Kunz
stated that
Krehl
“held that the former president of a company had been an insider solely by virtue of office prior to his resignation. After his resignation, he continued to be an insider—not because he was ‘president emeritus’ or ‘former president,’ as the Trustee in this case would apparently argue—but because
on the evidence
he remained
in control
of the company.”
Id.
(emphasis added). In addition, the
Krehl
court itself noted that “a court should look to all of the circumstances to determine whether the relationship between the individual and the corporate entity [is] so close that the two could not be said to be dealing at arms [sic] length.”
In this case, the bankruptcy court held that Creditor was a non-statutory insider of Debtor despite the absence of any control, intention to control, or undue influence by Dr. Seitz and Dr. Seitz’s “sensitivity]” to “potential conflicts of interest” and attention “to the kinds of formalities one would expect to see in dealings between third parties at arm’s length.” App. at 246-47. Therefore, because the bankruptcy court held that “[t]he extreme closeness of the relationship” between the two “is determinative,” without any finding that the transactions between Creditor and Debtor were not at arm’s length or that there was undue influence or control by Creditor, it erred in holding that Creditor was a non-statutory insider of Debtor.
Id.
at 248;
see Kunz,
Trustee further contends that (1) the absence of control or of an arm’s-length relationship is not determinative, (2) Dr. Seitz’s access to inside information supports the bankruptcy court’s decision, (3) through Dr. Seitz, Creditor was a de facto director and strategic partner of Debtor, and (4) the bankruptcy court did not create a per se rule that a creditor corporation with one of its executives on a debtor’s board makes that creditor a non-statutory insider, but rather the bankruptcy court ruled based upon all the facts and circumstances. We are not persuaded.
First, although Trustee is correct that an absence of actual control does not rule out non-statutory-insider status, that
*1279
does not resolve the issue. The bankruptcy court necessarily had to determine that Creditor did not actually control Debtor to rule that it was a non-statutory, rather than a statutory, insider.
See
11 U.S.C. § 101(31)(B)(iii), (41). Trustee seems to recognize this but misses the broader point. Aplt. Reply Br. at 5. A “person in control of the debtor” is a
statutory
insider of the debtor under 11 U.S.C. § 101(31). The definition of “person” includes a corporation — in this case, Creditor. 11 U.S.C. § 101(41). Trustee relies upon
In re Three Flint Hill Ltd. P’ship
for support, a case holding that “actual control is not a predicate to finding someone to be an extra-statutory insider.”
Next, Trustee contends that he is not required to prove the absence of an arm’s-length transfer because a court may still conclude that a creditor is a non-statutory insider even though the creditor transacted at arm’s length with the debtor. Aplt. Br. at 21. He states that “[p]roof of closeness sufficient to permit the
opportunity
of gain is all that is required by the statute.”
Id.
at 22 (emphasis original). Trustee relies upon
Kunz,
The statutory-insider categories under 11 U.S.C. § 101(31) treat certain people or entities as insiders regardless of whether they made any transfers. Trustee reminds us that several sections of the Bankruptcy Code use the term “insider” with the same applicable definition, but only two, including 11 U.S.C. § 547(b)(4)(B), concern transfers of property. Id. at 23-24. Trustee also argues that the “ordinary course of business” defense under 11 U.S.C. § 547(c)(2)(A) 6 does not permit a trustee to avoid what amounts to an arm’s-length transaction with an insider, but if a transaction not at arm’s length is required to show nonstatutory-insider status, non-statutory insiders will never have an “ordinary course of business” defense because less-than-arm’s-length transfers are always outside the ordinary course of business. Id. at 25; see Black’s Law Dictionary 109 (6th ed.1990).
We initially note that the legislative history pertaining to the definition of “insider” clearly states that “[a]n insider is one who has a sufficiently close relationship
*1280
with the debtor that his conduct is made subject to closer scrutiny
than those dealing at arms [sic] length with the debtor.”
S.Rep. No. 95-989, at 25 (1978), 1978 U.S.Code Cong. & Admin.News 5787, 5810; H.R.Rep. No. 95-595, at 312 (1977) (emphasis added);
see
Aplee. Br. at 14, 25.
Kunz
stated that the insiders explicitly listed in 11 U.S.C. § 101(31) give rise to a “conclusive presumption” that they have such a relationship whereas non-statutory insiders must have a relationship that “compels the conclusion” that a creditor and a debtor are “close enough to gain an advantage attributable simply to affinity rather than to the course of dealings between the parties.”
Further, with respect to Trustee’s statutory-construction arguments, a non-statutory insider who has engaged in a less-than-arm’s-length transaction fits just as well into the Bankruptcy Code provisions as a per se insider. We hold here that a creditor may only be a non-statutory insider of a debtor when the creditor’s transaction of business with the debtor is not at arm’s length; a bankruptcy court, however, may find a statutory insider without this requirement. The “ordinary course of business” defense is still available for any transactions between a non-statutory insider and a debtor as well as for transactions between a statutory insider and a debtor that are in “the ordinary course of business” — transactions that must be at arm’s length. 11 U.S.C. § 547(c)(2)(A).
Here, where the bankruptcy court considered a variety of factors and found that all relations between Creditor and Debtor were at arm’s length, App. at 247, a ruling that Creditor is a non-statutory insider does not follow. Although some individuals or entities specifically mentioned in 11 U.S.C. § 101(31) must be insiders even if they operated at arm’s length because Congress dictated this “conclusive presumption,” a non-statutory insider, by definition, is not operating at arm’s length with the debtor.
Kunz,
Trustee next argues that because Creditor had access to Debtor’s inside information by virtue of Dr. Seitz’s position on Debtor’s board, Creditor was a non-statutory insider.
7
Aplt. Br. at 25-26. The first
*1281
case upon which the Trustee relies was reversed on appeal and does not support his argument.
See In re Papercmft Corp.,
Trustee also relies on the short statement by the
Krehl
court that “[a]ccess to inside information
can
be sufficient to confer insider status even where there is no legal right or ability to exercise control over a corporate entity.”
Trustee next argues that Creditor was a
“de facto
director” of Debtor, and therefore a non-statutory insider, because Dr. Seitz was on Debtor’s board.
8
Aplt. Br. at 27 (emphasis original). He also argues that the fact Debtor and Creditor had an “important strategic alliance” suggests that Creditor was a non-statutory insider of Debtor.
Id.
at 28. Trustee also relies
*1282
upon
Papercraft,
Trustee also cites one unpublished bankruptcy case to support his “strategic alliance” argument. Aplt. Br. at 28. The court in that case, in denying a motion to dismiss, admitted that such a “strategic alliance” argument was a “novel issue” and that “[establishing insider status for Defendant may be a hurdle which Plaintiff cannot clear, for the duties of strategic partners toward one another would not be at the level of general partners.”
In re Winstar Commc’n, Inc.,
No. 01-01430,
Finally, Trustee contends that the bankruptcy court did not create a new per se category of insider through its decision. Aplt. Br. at 29-30. The BAP interpreted the bankruptcy court’s decision as dictating that a creditor corporation with an executive officer on the board of a debtor is a non-statutory insider of that debtor. App. at 274. Trustee contends that the numerous factual findings of the bankruptcy court indicate that its decision was based upon the unique facts of Creditor’s relationship with Debtor and allows similar cases to be decided on their facts as well. Aplt. Br. at 29-30.
Other than reciting the bankruptcy court’s statement that “the statutory or per say [sic] categories of insiders should not be expanded by judicial interpretation” and fisting the various factual findings of the bankruptcy court pertaining to the relationship between Creditor and Debtor, however (none of which seem remarkable considering the typical relationship between a corporation and its directors), Trustee does not address the BAP’s fears that a closeness-alone test would create a “de facto director,” per se rule.
Id.
Such a rule would force corporations to find directors from companies with which they do no business and would impermissibly create a new category of insider not determined within the context of “particular cases, based on the specific facts.”
Kunz,
AFFIRMED.
Notes
. An avoidable preferential transfer includes "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 [the Bankruptcy Code];
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by the provisions of [the Bankruptcy Code].”
11 U.S.C. § 547(b).
. Any transfer on or within ninety days of the date of the debtor's filing of a bankruptcy petition is already generally avoidable. See 11 U.S.C. § 547(b)(4)(A). However,
[i]n the case of creditors who are insiders of the debtor, the preference period is extended from 90 days to one year prior to filing. Simply stated, the reason for the extended preference period is that insiders are far more likely to be given preferential treatment in debt repayment than creditors who deal with the debtor at arm’s length. In addition, insiders have the power to influence or even control the date of filing for bankruptcy in relation to the dates of repayment to themselves.
A. Tarricone,
. Dr. Seitz was a director on Debtor’s board, but the question here is whether Creditor, as a corporation, was an insider, not Dr. Seitz.
. An arm’s-length transaction is “[a] transaction in good faith in the ordinary course of business by parties with independent interests .... The standard under which unrelated parties, each acting in his or her own best interest, would carry out a particular transaction.” Black’s Law Dictionary 109 (6th ed.1990).
. The "control” to which such cases refer can only correctly be interpreted as something short of actual, legal control over the debtor’s business because "actual control” would subject the creditor to the statutory category of "person in control of the debtor” under 11 U.S.C. § 101(31). Any interpretation of "control” within the non-statutory-insider context as anything like the ability "to order, organize or direct” the debtor’s operations is simply incorrect.
Friedman,
. 11 U.S.C. § 547(c)(2)(A) states that "[t]he trustee may not avoid under this section a transfer to the extent that such transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee, and such transfer was made in the ordinary course of business or financial affairs of the debtor and the transferee.”
. Trustee also reminds us that the BAP never mentioned in its opinion the bankruptcy *1281 court’s finding that "[Creditor] had ‘complete access to all information that is available only to corporate insiders.’ ” Aplt. Br. at 5. We rule here, however, that Dr. Seitz’s theoretical access to inside information in this case does not confer non-statutory-insider status on Creditor and therefore this omission is inconsequential.
. This argument suggests that because Dr. Seitz, the CEO of Creditor, was a director of Debtor, Creditor should be considered a "de facto” director of Debtor. An individual who was a director of a debtor would be an insider of that debtor under 11 U.S.C. § 101(31) and so, according to the Trustee, a creditor corporation with one of its executives on a debtor’s board should be considered an insider of that debtor as well.