Delaware Bankruptcy Avoidance and Preference Action Lawyer

A company entering bankruptcy, creditors of the business and the bankruptcy trustee all have the option to review past payments made by the bankrupt company and may sue to bring those assets back into the bankruptcy estate.

The bankruptcy attorneys at Casarino Christman Shalk Ransom & Doss, P.A. represent creditors and others who face lawsuits over such payments, typically referred to as Avoidance and Preference actions, in U.S. Bankruptcy Court for the District of Delaware.

To discuss a case or schedule a consultation, please contact Casarino Christman Shalk Ransom & Doss, P.A., at 302-594-4500 or after 5 p.m. prevailing Eastern Time at 302-547-5859.

Preference Avoidance

Any payment made by a debtor to a creditor within 90 days of filing bankruptcy may be called into question as a preferential or fraudulent transfer of assets. It may be examined by the trustee or by a creditors' committee. If the debtor-creditor relationship is close, such as a business partner, business affiliate, or subsidiary, the timeframe in which payments can be examined may be as much as one year.

In order to make additional assets available for distribution, the debtor, the creditors' committee or the bankruptcy trustee may bring a preference avoidance action to establish that payments were preferential and may demand that a payment or payments be returned to be redistributed among all creditors.

Often the amount demanded is far greater than the amount, if any, actually owed.

Fraudulent Transfer Actions

Fraudulent transfer proceedings commonly accompany preference avoidance actions. They are filed against creditors by debtors or trustees to recover a transfer that occurred prior to bankruptcy. The debtor or trustee argues that the transfer made prior to bankruptcy was a fraudulent transfer and is owed to the bankruptcy estate.

Often one or more defenses are available, including that the transfer was not in good faith for reasonably equivalent value.

Representative Bankruptcy Preference and Avoidance Actions

Recent representative matters include:

• In re AMEC Holding Corp. (AMEC Liquidating Trust) (Chapter 7 Preference Action)
• In re American Pad & Paper, Inc. (Preference and Avoidance Action)
• In re Astropower, Inc. (Chapter 11 Preference Action Against Inverter Manufacturer)
• In re BRAC, Inc. (Chapter 11 Preference Action)
• In re Maxide Acquisition, Inc. (DMX Creditors Liquidation Trust) (Alleged Preference and Avoidance Adversary Proceedings Against Multiple Creditors)
• In re Factory 2-U Stores, Inc. (Defense of Multiple Defendants in Chapter 7 Adversary Proceedings)
• In re Gentek, Inc. (Defense of Chapter 11 Preference Action)
• In re S-Tran Holdings, Inc. (Service Transport, Inc.) (Defense of Alleged Preference and Avoidance Adversary Proceeding under Intermodal Trust Doctrine)
• In re The Loewen Group (Defense of Adversary Proceeding against Alleged Insider)
• In re Ultimate Electronics, Inc. (Liquidating UE, Inc.) (Defense of HVAC Manufacturer and Distributor against Alleged Preference and Avoidance Adversary Proceeding)

We work as quickly as possible to resolve cases. Through preparation and negotiation, we are prepared to do whatever is required to establish the defenses and work towards a favorable outcome for our client.

If you would like to discuss a bankruptcy matter or schedule a consultation, please contact us at 302-594-4500.

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