The Eleventh Circuit sided with the Third Circuit in finding that a creditor’s administrative claim under 11 U.S.C. § 503(b)(9) does not offset its new value defense pursuant to 11
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Eleventh Circuit Holds “New Value” Need Not Remain Unpaid
Michael Temin writes:
One of the commonly asserted defenses to preference avoidance actions is the “new value” defense set forth in 11 U.S.C. § 547(c)(4). One issue considered by courts
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AE Liquidation Opinion Narrows New Value Defense
In an 11 page decision signed March 29, 2016, Judge Walrath of the Delaware Bankruptcy Court revised a calculation of new value pursuant to an order from the District Court
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Capitol Infrastructure, LLC Preference Litigation
From April 22 – 24, 2014, Jeoffrey L. Burtch, Chapter 7 Trustee of the Capitol Infrastructure, LLC bankruptcy estates, filed approximately 71 complaints seeking to avoid and recover alleged preferential
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Preference Payments: Brief Analysis of Preference Actions and Common Defenses
It’s your worst nightmare: you provided goods and services to a financially struggling company, only to find out that it filed for bankruptcy, leaving your company with a large unpaid
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Ruling Confirms that Judicial Liens are Dischargeable in Chapter 7
Summary
In an opinion issued March 16, 2012, Judge Sontchi of the Delaware Bankruptcy Court ruled that unpaid debts subject to a judicial lien are dischargeable in bankruptcy. Judge Sontchi’s
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Decision in Sierra Concrete Design, Inc. Provides a Thorough Explanation of the Principles Behind Bankruptcy’s Preference Laws
Summary
In an opinion issued January 4, 2012, Judge Sontchi of the Delaware Bankruptcy Court provided an easy to follow primer in preference law in the course of granting in
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VeraSun Energy Files 199 Avoidance Actions in Bankruptcy Court
Introduction
On October 31, 2008, VeraSun Energy Corporation (“VeraSun”), and 24 of its affiliates or subsidiaries filed petitions for bankruptcy in the United States Bankruptcy Court for the District of
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Mortgage Lenders Network Files Preference Actions
Introduction
In January, Mortgage Lenders Network commenced over 65 adversary actions against various defendants, seeking the avoidance and recovery of preferential transfers (read one of the preference complaints here). As reflected in its complaints, Mortgage Lenders filed a chapter 11 bankruptcy petition in the Delaware Bankruptcy Court on February 5, 2007. During the ten years prior to its bankruptcy, Mortgage Lenders grew from a small mortgage company with seven employees, to a residential mortgage provider serving 47 states with over 1,700 employees.
Given the commencement of Mortgage Lenders’ preference program, this post provides a brief summary of the elements and common defenses to preference claims.
Elements to a Preference Claim
In order to establish that a party received a preferential transfer, the plaintiff must prove that payments were received by a creditor on account of an “antecedent debt.” Further, the preferential payments must be made (i.) while the debtor was “insolvent”, (ii.) made within 90 days before the debtor filed for bankruptcy, and (iii.) the payments provide the creditor with more payments than it would receive if the debtor had liquidated under a chapter 7 liquidation.
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Defending Avoidance Actions: The “Settlement Payment” Safe Harbor Receives Broad Interpretation Under In re Elrod Holdings
When considering defenses to avoidance actions, ordinary course, new value and contemporaneous exchange often come to mind. A less common defense arises under 11 U.S.C. § 546(e), excluding from avoidance actions "settlement