Defending Preference Claims
Preference litigation is a necessary annoyance to creditors in a bankruptcy case. Our clients’ credit managers rightfully try to collect what is justly due their companies, even from debtors on the verge of bankruptcy. After the bankruptcy case is filed, the company or its trustee tries to claw back payments made within the 90 days prior to the bankruptcy case. Lakelaw knows about preferences. It has litigated and won cases on both sides of this issue. It can help you do a statistical preference analysis using mean and standard deviation analysis which can establish the ordinary course of business. Lakelaw can introduce you to experts who can establish the ordinary course of dealings in your industry. Lakelaw can also determine if you gave new value either at or near the time you were paid. These important defenses may eliminate any preference claim which a trustee may have against you or your company.
Reclamation is a closely related concept. If you sold goods to a debtor near the time of the filing of a bankruptcy case, you can’t just get the goods back as you might under the Uniform Commercial Code. However, you might be entitled to an administrative claim. There are many ways to do this wrong. Lakelaw knows how to do this right. If you have a reclamation claim, call us immediately. Time is of the essence. And if you sell goods, call us too. We can help you draft a contract which will dramatically improve your chances of recovering a reclamation claim either in or outside of bankruptcy.
