Chapter 7 trustee sought to avoid a transfer debtor had made to a related entity, alleging it was a preference under 11 U.S.C. § 547(b), and defendant moved for partial summary judgment. The transaction at issue was part of a three-way debt forgiveness between debtor, defendant, and another related entity. Defendant argued that the transaction constituted a setoff rather than a transfer, and thus § 547(b) was inapplicable. The court agreed that § 547(b) does not apply to setoffs, and considered whether the "triangular setoff" at issue fell within the protection of 11 U.S.C. § 553(a). The court held that creditors only have the right to setoff "mutual debt," which generally requires that debtor and creditor owe debts to each other, and as such, triangular offsets are not typically considered "mutual." The court recognized narrow exceptions to that outcome, however, where the debtor "formally agreed" that two related entities could aggregate debts owed to and from debtor as a setoff, or where the other entities were alter egos of one another. Concluding that these scenarios were fact-dependent, the court denied defendant's summary judgment motion.