earmarking doctrine
- A principle in bankruptcy law where a loan given to a debtor by a third party, intended specifically for paying off a certain creditor, is not susceptible to avoidance by the trustee for preference, given that the debtor did not really possess control over the funds and such a transaction does not reduce the debtor's estate
- The bankruptcy court applied the earmarking doctrine to prevent the trustee from avoiding the third-party loan.
- Under the earmarking doctrine, the debtor was unable to control the funds as it was directly given to the specified creditor.
- The earmarking doctrine clarified that the debtor's estate was not lessened by the loan given by a third party.
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