Debtor, who had agreed to act as escrow agent on a loan from plaintiff to a third party, improperly used escrowed funds to pay its own debts to a good faith creditor. After debtor was involuntarily placed in bankruptcy, the chapter 7 trustee recovered the funds from debtor's creditor on the ground that the payments were avoidable preferences. Plaintiff filed an adversary proceeding contending that the recovered amount was subject to a trust in its favor, and was thus not available for distribution to other creditors. The bankruptcy court ruled that the recovered funds were estate property, and that plaintiff simply had an unsecured claim against the estate. The district court affirmed, rejecting plaintiff's claim that the trustee could not recover a greater interest in the funds than debtor would have had. The district court noted that a trustee's avoidance power is an extraordinary power that debtor does not have, which allows the trustee to retrieve property transferred by the debtor that, in equity, all of debtor's creditors should share. This district court order was reversed by a divided decision in 872 F.2d 335 (10th Cir. 1989), and that decision was then vacated on en banc review in 917 F.2d 424 (10th Cir. 1990) [313a.pdf], which affirmed the district court.