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Preferential Transfers (Preference Payments)

int_slide05In most mid-sized and large corporate bankruptcies, many innocent third parties are forced to defend themselves from actions called Preferences, usually brought by the debtor or some other party (a Trustee or a Committee of Creditors, perhaps) to try to recapture money paid out by the debtor in the months leading up to the bankruptcy filing. While the theory behind these actions is a sensible and simple one – the bankruptcy system would like all of the creditors to be treated similarly – the specifics of most Preference cases are neither sensible nor simple. Usually, a company gets sued for every dollar it received from a debtor in the 90 days before the bankruptcy case was formally filed with the Court. While there are defenses that will defeat at least a part of most of these cases and all of many of them, most companies are unfamiliar with this area of the law, and even less familiar with the available exceptions to the general rule that monies paid in this 90 day window must be repaid. Please call me with the facts of your particular case. Be ready to provide me with all of the facts of your relationship with the Debtor, and be prepared for me to ask for very detailed historical information on your dealing going back several years in some cases. These cases are very fact specific, and I look forward to working through your situation with you. Please call me to discuss it.