dilemma to be bankruptcy system. they can create a conflict between two important commercial and bankruptcy policies. The independence doctrine of L/C law and the preference provisions of the Bankruptcy Code. On the one hand , the effectiveness of L/C is based on fact that the obligation of the issuing bank to pay a beneficiary is independence of the underlying transaction between the beneficiary and the account party. This is known as the independence doctrine of L/D law. On the other hand, bankruptcy law eschews eve of bankruptcy transfers by a debtor with benefit one creditor to the detirment of other similarly situated creditors. The preference provision of the Code allow the debtor to void such pre-bankruptcy transfer and recover the property to the debtor's estate for the benefit of all creditor. The dilemma arise when the account party to L/C become