INTRODUCTION
T1 This сase addresses two issues of first impression for this court. The first issue is whether federal bankruptcy law should be used to interpret the voidable preference provisions of Utah Code section 81A-27-821 (2001). Appellant, Wilcox, argues that because there is no prior Utah case law addressing section 81A-27-321, 11 U.S.C. § 547(c) (1988), a "comparable" provision of the Federal Bankruptcy code, should guide this court's statutory interpretation. The second issue is whether appellee, CSX Corporation's, actions satisfy either of the affirmative defenses found in section 81A-27-821 of the Utah Code, namely, the new and contemporaneous consideration defense found in section 81A-27-321(4)(a) and the ordinary course of business defense found in section 31A-27-321(4)(b). 1 We hold that it is proper for this court to rely on 11 U.S.C. § 547(c) of the Fеderal Bankruptcy code for guidance in interpreting Utah Code section 31A-27-321 and that neither affirmative defense found in section 31A-27-821 has been satisfied. We therefore reverse the decision of the trial court.
BACKGROUND
T2 The facts in this case are not in dispute. Southern American Insurance Company (SAIC) was incorporated and began providing insurance coverage in 1984. Between July 14, 1979 and July 31, 1982, SAIC sold three insurance policies to CSX Corporation (CSX) and its predecessors. These policies provided CSX with liability coverage for all of its asbestos-related claims. On or about October 3, 1985, CSX's predecessors filed two separate lawsuits against SAIC. On or about January 11, 1990, a predecessor of CSX filed a third lawsuit against SAIC. Each *89 of these three claims against SAIC (the asbestos coverage litigаtion) involved disputes regarding the extent to which SAIC would cover CSX's asbestos liability. 2
T3 In March of 1991, SAIC and CSX commenced settlement negotiations for the asbestos coverage litigation. On or about October 14, 1991, the parties cireulated a settlement letter setting forth the settlement terms and conditions to which SAIC and CSX had agreed. Shortly thereafter, the parties executed the Settlement Agreement (Agreement), with CSX signing on October 17, 1991 and SAIC signing on October 25, 1991. The Agreement obligated SAIC to make three payments totaling $308,000 to CSX in exchange for CSX's agreement to release SAIC from all past, present, and future claims arising from asbestos litigation.
{4 In accordance with the Agreement, SAIC made the following payments to CSX: $102,667 on October 28, 1991, $102,667 on November 26, 1991, and $102,666 on January 2, 1992. Subsequently, on March 25, 1992, the liquidator successfully filed а petition for SAIC's liquidation. The next day, March 26, 1992, the liquidation court issued a liquidation order against SAIC, and on April 10, 1992, the liquidation court declared SAIC insolvent pursuant to sections 81A-1-801(89) and 31A-27-310(4) of the Utah Code 3 Approximately two years later, on March 25, 1994, the liquidator filed the present action against CSX, claiming that the payments made by SAIC to CSX pursuant to the Agreement were voidable preferences under Utah Code sections 31A-27-321(1)(b) and (c).
PROCEDURAL HISTORY
T5 On February 2, 2000, CSX moved for summary judgment, arguing that the payments were (1) not voidable preferences as a matter of law because the payments were for new and contemporaneous consideration, (2) made in the ordinary course of SAIC's business and within forty-five days of the date the payments were legally obligated to be paid, and (8) made in exchange for the rеlinquishment of all past, present, and future asbestos-related claims. On March 30, 2000, the liquidator filed its opposition to CSX's motion and submitted its own motion for summary judgment, arguing that all the elements of a preferential transfer under Utah Code sections $1A-27-321(1)(b) and (c) were met as a matter of law. Oral argument on the cross motion was heard on March 5, 2001, and on March 12, 2001, the district court issued a memorandum decision, ruling that since "the Settlement Agreement between SAIC and CSX released CSX's existing and future claims[,] ... the payments received by CSX were for new and contemporaneous consideration." The district court entered an order on April 3, 2001 granting CSX's motion for summary judgment and denying the liquidator's motion. The liquidator appealed.
STANDARD OF REVIEW.
16 " 'Generally, we review a trial court's legal conclusions for correctness, according the trial court no particular deference." Wilson Supply, Inc. v. Fradan Mfg. Corp.,
ANALYSIS
T7 The applicable provisions of Utah Code section 314A-27-821 at issue in this case are as follows:
(1)(a) [A] "preference" means a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or allowed by the insurer within one year before the *90 filing of a successful petition for rehabilitation or liquidation....
(b) Any preference may be avoided by the rehabilitator or liquidator, if;
(i) the insurer was insolvent at the time of the transfer; [or]
() the transfer was made within four months before the filing of the petition[.]
Section 31A-27-821 allows a liquidator to recover certain preferential payments made to an insurance company's creditors prior to liquidation. Prohibiting preferential payments to creditors prevents an insurer from paying off its favorite creditors on the eve of liquidation. Pine Top Ins. Co. v. Bank of Am. Nat'l Trust & Sov.,
(4) The receiver may not avoid a transfer of property under this section for or because of:
(a) a new and contemporaneous consideration; [or]
(b) the payment, within 45 days after a debt is incurred, of a debt incurred in the ordinary course of the business of the insurer and according to normal business terms[.]
No prior Utah case law has interpreted these two statutory defenses. We therefore discuss the relevance of using a similar provision of the Federal Bankruptey code, 11 U.S.C. § 547(c), in the interpretation of the new and contemporaneous consideration defense and the ordinary course of business defense found in Utah Code section 31¥A-27-821(4).
I. RELEVANCE OF 11 U.S.C. § 547(c) TO UTAH CODE SECTION 31A, 27-321
T8 "When faced with a question of statutory construction, 'we seek to give effect to the intent of the legislature in light of the purpose the act was meant to achieve." State v. Ostler,
1 9 Courts have consistently explained that [tlhe purpose of 11 U.S.C. § 547 is to 'accomplish proportionate distribution of the debtor's assets among its creditors, and therefore to prevent a transfer to one creditor that would diminish the estate of the debtor that otherwise would be available for distribution to all" " In re Futoran,
€ 10 Section 547 of the Federal Bankruptcy code provides that a trustee in bankruptcy
(b) ... may avoid any transfer of an interest of the debtor in property-
(1) to or for the benefit of a ereditor;
(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 ... under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such ereditor received payment of such debt to the extent provided by the provisions of this title.
However, sections 547(c)(1) and (2) of the Federal Bankruptey code also provide that a debtor's transfer, which satisfies the above criteria, may nevertheless be deemed non-preferential if the transfer was
(1)(A) intended by the debtor and the . creditor to ... be a contemporaneous exchange for new value given to the debtor; and
(1)(B) in fact a substantially contemporaneous exchange; ... [or]
(2)(A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee;
(2)(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
(2)(C) made according to ordinary business terms[.]
[11 SAIC contends that "[blecause the policy underlying the preference doctrine under state insurance Hquidation law is the same as that under federal bankruptcy law," this court should use 11 U.S.C. § 547(c) of the Federal Bankruptcy code as guidance in interpreting the affirmative defenses found in Utah Code section 31A-27-321. On the other hand, CSX argues that the relevant provisions of section 31A-27-821 are not ambiguous on their face. For example, CSX asserts that the terms "consideration" and "ordinary course of business" have only one meaning respectively, precluding the court from looking outside the language of the statute.
{12 We find that an ambiguity exists in the statute and that it is therefore proper to look to legislative history and policy considerations for guidance in our statutory interpretation. The ambiguity lies in the fact that, although the term "consideration" is a so-called term of art, it is not as uniformly defined in all contexts as sppellee alleges. 5 CSX argues that the legislature's use of the *92 term "consideration" in section 81A-27-321(4)(a) instead of the term "value," which is used in 11 U.S.C. § 54T(c)(1)(A), evidences that the Utah legislaturе's choice of words was intentional. CSX supports this contention by citing the fact that section 31A-27-321(4)(d) uses the term "value" instead of "consideration." Therefore, according to CSX, the legislature must have defined and used the terms differently.
113 Legislative history suggests that the terms "value" and "consideration" are not mutually exclusive but are often used interchangeably. Because 11 U.S.C. § 109(b)@Q) excludes "domestic insurance companies" from being debtors under Chapter 7 liquidation proceedings, insurance companies are subject to state liquidation statutes. Most, if not all, state insurance liquidation statutes were based on federal bankruptey 6 This is most likely true with regard to section 31A-27-321 because even though 11 U.S.C. § 547(c) presently uses the phrase "contemporaneous exchange for new value" to de-sеribe one of the affirmative defenses to the federal preference rule, the 1898 Bankruptcy Act used the term "new and contemporaneous consideration. 7 " The Bankruptey Act of 1898, ch. 541, 30 Stat. 544 (repealed 1978).
{14 Additionally, the terms "value" and "consideration" have often, in the voidable preference context, been used interchangeably. For example, section 60(b) of the 1898 Bankruptey Act states, "where such purchaser or lienor has given less than such valug, he shall nevertheless have a lien upon such property, but only to the extent of the consideration actually given by him." In a more recent federal bankruptcy case, the court stated:
The payments in the instant case bear none of the earmarks of a contemporaneous exchangе. The parties to the litigation settled upon a penalty to cure violations and then they set forth a schedule for payment. There was no new consideration, no contemporameous exchange for new value, only payment upon an antecedent debt to satisfy a fine on long standing violations.
Fisher v. New York City Dep't of Hous. Pres. and Dev. (In re Pan Trading Corp.),
115 The definition of "consideration" CSX urges this court to adopt is overly broad in that it includes an essential element of contract formation. However, the validity of the contractual agreement between CSX and SATC is not at issue here. The issue here is whether the payments made pursuant to the Agreement constituted a voidable preference and are therefore out of the liquidator's reach. In our view, CSX's intеrpretation of the terms "consideration" and "ordinary course of business" would produce a result contrary to the fundamental underpinnings of this type of liquidation statute. We must consider the terms used by this statute in light of the statute's basic structure and purpose to ensure that the policy justification behind the statute (the equitable distribution of the debtor's assets) is not undermined. When there is no legislative history for the state statute, as is the case here, we are comfortable following the Seventh Circuit's rule of thumb: "[WJhen confronted with a voidable preference dispute under state insurance law, it is customary to look to federal bankruptcy law for guidance." Pine Top Ins. Co.,
II. ANTECEDENT DEBT
16 A receiver may avoid a transfer of property when the "property of an insurer" is transferred "to or for the benefit of a creditor, for or on account of an antecedent debt, made or allowed by the insurer within one year" from the filing of a successful *93 liquidation petition, unless (1) the transfer is made for "new and contemporaneous consideration," or (2) the payment is made "within 45 days after a debt is incurred ... in the ordinary course of the business of the insurer and according to normal business terms." Utah Code Ann. §§ 81A-27-321(1)(a), (4)(a), (48)(b) (emphasis added).
117 Before addressing the affirmative defenses, we must first determine whether SAIC made payments to CSX "for or on account of an antecedent debt." Id. § 31A-27-321(1)(a). Under the Bankruptcy Code, "debt" is defined as "lability on a claim." 11 U.S.C. § 101(1). "A debt is antecedent if it is incurred before the transfer." Southmark Corp. v. Schulte Roth & Zabel,
118 The Utah Legislature has defined "claim" as "a request or demand on an insurer for payment of benefits according to the terms of an insurance policy," Utah Code § 31A-1-301(19), and "creditor" as "a person, including an insured, having any claim, whether: (a) matured; (b) unmatured; (c) liquidated; (d) unliquidated; (e) secured; (f) unsecured; (g) absolute; (h) fixed; or %) contingent," Id. § 31A-1-301(28). It seems consistent with the intent of this preference statute (to preserve an equitable distribution of insurer's assets upon liquidation) that the term "claim," as defined by the state legislature, be synonymous with the term "debt." Here, CSX (the insured) was clearly a creditor with an unmatured claim, and if CSX was *94 the creditor, SAIC must therefore have been the debtor. 10
€ 19 Additionally, a erucial factor in whether a transfer was made for or on account of an antecedent debt is determining when the debt, or in this case the claim, arose. Ogden v. Hazen,
T20 Even though CSX contends that federal bankruptey law should not guide our analysis in this case, CSX relies upon In re White River Corp.,
121 CSX's analogy to lease payments becoming debts upon their due date is incongruous with the facts of this case. Courts have stated that "a debt for rent is incurred as the lease progresse[s] rather than . when the lease [is] executed." Iowa Premium Serv. Co. v. First Nat'l Bank (In re Iowa Premium Serv. Co.),
III. NEW AND CONTEMPORANEOUS CONSIDERATION
22 In its memorandum decision, the district court held that, since "the Settlement Agreemеnt between SAIC and CSX released CSX's existing and future claims[,] ... the payments received by CSX were for new and contemporaneous consideration." We disagree with this conclusion.
123 We agree with SAIC that CSX must prove the payments it received from SAIC were both "new" and "contemporaneous." First, SAIC's payments to CSX did not constitute "new" consideration because a release of future Hability under the policy and a foregone right to judgment with respect to the policy are not new and contemporaneous consideration. The general rule is that "[florbearance from exercising pre-existing rights does not constitute new value." Am. Bank v. Leasing Serv. Corp. (In re Air Conditioning, Inc. of Stuart),
124 The requirement that the consideration be "new" is to allow the insurer "to procure necessary goods and services" that do not diminish the value of the insurer's estate. In re Pan Trading Corp., 125 *96 BR. at 876 (referring to the "new value" exception of § 547 of the Bankruptey Code). In this case, SAIC did not receive any goods or services from CSX. The only thing SAIC received was CSX's promise to not pursue any further litigation relating to the insurance policy. Such forbearance is not "new consideration" under Utah Code section 31A-27-8321.
125 Second, we must determine whether CSX gave SAIC "contemporaneous 13 } consideration. We previously established that the three payments provided for in the Agreement between CSX and SAIC were in satisfaction of an antecedent debt. Thus, CSX and SAIC were not engaging in a contemporaneous transaction but were settling a pre-existing business obligation that arose under the insurance policy effective between 1979-1982. No new consideration was given contemporaneously.
126 We find the above conclusions to be in harmony with the policy behind Utah's voidable preference provision. The policy behind the new and contemporaneous consideration defense is that a debtor should not be able to make transfers оn the eve of liquidation that "deplete[] [the debtor's assets] to the detriment of the other creditors." In re Futoran,
When a creditor threatens to exercise a legal remedy against a debtor, and in exchange for not so doing extracts a payment for antecedent debt, nothing of value has accrued to the debtor estate to compensate other creditors for the loss of that payment. ... Such a transaction falls squarely within the ambit of the preference law, rather than within its exceptions.
Womack v. Houk (In re Bangert),
1 27 CSX relies upon the holdings in Lewis v. Diethorn,
IV. ORDINARY COURSE OF BUSINESS
28 Section 31A-27-821(4)(b) of the Utah Code provides that a "receiver may not avoid a transfer of property" if "the payment" is made "within 45 days after a debt is incurred ... in the ordinary course of the business of the insurer and according to normal business terms." CSX contends that the liquidator may not avoid the three payments at issue in this case because each element of the ordinary cоurse of business provision has been satisfied.
129 We hold that CSX has not sufficiently established this affirmative defense. First, because we previously determined that SAIC's payments to CSX were made for or on account of an antecedent debt and that SAIC's debt arose from the 1979-1982 policy period, we conclude that the payments were
not made within forty-five days after the debt was incurred; all three payments were made after October 1991.
180 Second, we also hold that the payments were not made in the ordinary course of SAIC's business. To prove a transfer is non-preferential under the ordinary course of business exception, the creditor must prove:
(1) that the 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, (2) that the transfer was made in the ordinary course of business or financial affairs of the debtor and the transferee, and (8) that ' the transfer was made according to ordinary business terms.
Fid. Sav. & Inv. Co. v. New Hope Baptist,
1 31 We now examine the "prior course of conduct" between SAIC and CSX to determine whether the payments were made to CSX in the ordinary course of business and according to normal business terms. In re Miniscribe Corp.,
CONCLUSION
182 We reverse the trial court's order granting summary judgment in favor of CSX because of our holding that SAIC's payments to CSX were made for or on account of an antecedent debt. Additionally, we hold that CSX failed to satisfy the requirements behind the new and contemporaneous consideration defense found in section 31A-27-321(4)(a) and the ordinary course of business defense found in section 81A-27-821(4)(b).
Notes
. In granting CSX Corporation's motion for summary judgment, the trial сourt found that new and contemporaneous consideration existed and therefore failed to "reach the remaining issues." One of the remaining issues, which was argued in the court below and in the briefs on appeal, is whether CSX Corporation's actions satisfy the ordinary course of business defense found in Utah Code Ann. section 31A-27-321(4)(b). Although the trial court did not rule on this issue, we deem it appropriate to do so here.
. Each law suit alleged, [slubstantial premiums have been expended to purchase such liability or indemnity policies, and all applicable conditions precedent under such policies have been met," and "[elach defendant insurance company is obligated under its liability or indemnity insurance policies to pay in full all sums which plaintiff shall become legally liаble to pay, through judgment, settlement or otherwise, in the asbestos-related bodily injury lawsuits."
. Section 31A-27-310(4) permits "the [insurance] commissioner [to] petition the court to declare the insurer insolvent."
. Pursuant to 11 U.S.C. § 547(g), "[the Trustee bears the burden of proving that the transfer ... is avoidable under section 547(b)." Rieser v. Landis & GYR Powers, Inc. (In re Bownic Insulation Contractors, Inc.),
. According to CSX, the operative definition of the term "consideration" should be as follows: ''The cause, motive, price or impelling influence which induces a contracting party to enter into a contract. The reason or material cause of a contract. Some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other." (quoting Black's Law Dictionary 306 (6th ed.1990)). CSX further argues that the term "consideration" in Utah Code section 31A-27-321(4)(a) should be synonymous with "fair consideration" as defined in section 31A-27-102(1)(b). We find this argument unpersuasive in light of the fact that the term "fair consideration" is specifically used in three different sections of the chapter, but not in the voida-. ble preference provisions at issue here. See, eg., Utah Code Ann. §§ 31A-27-319 to 321. We simply cannot assume that the legislature intended "new and contemporaneous consideration" to mean "fair consideration."
. Milton S. Wolke, Jr., Insurance Companies and Voidable Preferenсes, 18 Conn. L.Rev. 227, 228, * 261 (1986) (stating that "voidable preference sections [of state statutes] are based on either the 1938 Chandler Act, section 60 or one of the prior amendments to the 1898 Bankruptcy Act").
. Section 60(a)(8) of the Bankruptcy Act of 1898 states, "a transfer wholly or in part, for or on account of a new and contemporaneous consideration shall, to the extent of such consideration and interest thereon and the other obligations of the transferor connect therewith, be deemed to be made or suffered at the time of the transfer."
. Legislative history confirms just how broadly the term "claim" was intended to reach: "bly this broadest possible definition [of the term "claim"] ... the bill contemplates that all legal obligations of the debtor, no matter how remote or contingent, will bе able to be dealt with in the bankruptcy case." Southmark Corp.,
. The United States Supreme Court concurred with this interpretation.
Section 101(12) of the Bankruptcy Code defines "debt" as a "liability on a claim." This definition reveals Congress' intent that the meanings of "debt" and "claim'" be coextensive (citation omitted). Thus, the meaning of "claim" is crucial to our analysis. A "claim" is a "right to payment, whether or not such right is reduced to judgment, liquidated, unliq-uidated, fixed, contingent, matured, unma-tured, disputed, undisputed, legal, equitable, secured, or unsecured." 11 U.S.C. § 101(4)(A). As is apparent, Congress chose expansive language in both definitions.... For example, to the extent the phrase "right to payment" is modified in the statute, the modifying language ("whether or not such right is ...") reflects Congress' broad rather than restrictive view of the class of obligations that qualify as a "claim" giving rise to a "debt." See also H.R.Rep. No. 95-595 (describing definition of "claim" as "broadest possible" and noting that Code "contemplates that all legal obligations of the debtor ... will be able to be dealt with in the bankruptcy case"); accord, S.Rep. No. 95-989.
Pa. Dep't of Public Welfare v. Davenport,
. "A debt may exist even though it has not been valued conclusively and even though there is a bona fide dispute about the obligation to pay." Stamp,
. The October 14, 1991 settlement letter, which set forth the following terms and conditions, stated, "This sum shall be in full satisfaction of any claim by CSX against the policies issued by Southern for any losses due to Asbestos-Related Claims, past, present, or future, whether or not asserted in the [three lawsuits brought by CSX's predecessors]." In our view, this clearly demonstrates that both parties understood the pаyments to be in satisfaction of SAIC's obligation arising under the indemnification policy during 1979-1982, the effective duration of the policy.
. The policy provided, "The company will indemnify the insured for all sums which the insured shall become legally obligated to pay as damages ... because of personal injury or property damage." SAIC further agreed that it would indemnify CSX "with respect to all ultimate net loss because of personal injury which occurs during each annual period while this policy is in force commencing from its effective date."
. The Federal Bankruptcy code, 11 U.S.C. § 547(c)(1)(B), uses the term "substantially contemporaneous." Due to the fact that SAIC's debt was incurred during the policy period between 1979-1982, and the payments were made in October and November of 1991 and January of 1992, there is no question that the payments were not contemporaneous to any exchange, even if there had been "new" consideration, which in this case there was not. We therefore find it unnecessary to interpret the exact meaning of the "contemporaneous" element of the new and contemporaneous consideration defense at this time.
. In Lewis, the parties negotiated a settlement agreement whereby the debtor made payments to *97 settle pending litigation and the creditor agreed "to discontinue their suit ... and to lift the lis pendens on the property" at issue in the litigation. Id. at 649.
. One court noted: 600
[The defendants argue that the transfer was made, not on account of such antecedent debt, but rather to eliminate the costs and risks associated with litigation. The defendants rely on Lewis v. Diethorn,893 F.2d 648 , 650 (3d Cir.1990). Although Diethorn did hold that the settlement payments in the case before it were made in consideration for the termination of the lawsuit and release of a /is perndens, I am not persuaded by the Third Circuit's holding. The opinion contains no analysis whatsoever, and simply makes the conclusory statement that the payments were made for one reason rather than another. Dietkorn,893 F.2d at 650 .
Even if I could be convinced that Diethorn reached the proper conclusion on the facts before it, I would distinguish it from the case before me today.... Certainly the debtor's driving concern in settling the class action suit, as in any large commercial dispute, was the risk of liability. The settlement payments were made in light of such risk, and therefore were on account of the antecedent dеbt.
In re Bioplasty, Inc.,
. "For example, filing a lawsuit to enforce a debt may not be unusual when a debtor does not pay, but payments according to a settlement agreement are not according to ordinary business terms." In re Meridith Hoffman Partners,