Chapter 11 debtor was a partner in three partnerships, each of which obtained a loan from bank that was guaranteed by debtor's president. As the partnerships' manager, debtor would "upstream" excess partnership funds to itself, and then "downstream" funds to the partnerships for expenses, as needed. Such transfers were documented by bookkeeping entries that indicated increases or decreases in the debt balance between debtor and the partnerships. The chapter 11 trustee filed an adversary action against bank, seeking avoidance and recovery of transfers made by debtor to the partnerships, which the partnerships then transferred to bank in payment of their loans. Trustee claimed that debtor had essentially paid bank directly, arguing that the partnerships were mere "conduits" between debtor and the bank. The bankruptcy court agreed, and bank appealed. The district court accepted the bankruptcy court's conclusion that all of the elements of a preference under 11 U.S.C. § 547(b) had been satisfied, noting that debtor's transfers benefitted a creditor whether they were to the partnerships or to the bank. The district court then turned to the issue of liability under 11 U.S.C. § 550, which only allows recovery of preferential transfers from the initial transferee. The bankruptcy court had concluded that, since the partnerships were mere conduits for debtor's transfers, bank was the initial transferee. Although several tests for determining whether an entity is a "conduit" had been used by other courts, the bankruptcy court had held that the partnerships' failure to exercise "dominion and control" over the transferred funds rendered all other tests unnecessary. The district court disagreed, both because it found the bankruptcy court's position to be unnecessarily restrictive, and because the partnerships retained the right to use money received from debtor for their own purposes and, as such, were not mere conduits for debtor.