News - LegalEase Newsletter

Vol. 7, Issue 1 | January 1, 2009

Preferences

If you receive a payment from someone within ninety (90) days before that person or business files for bankruptcy, it is likely that you will receive a letter from a bankruptcy trustee claiming that such a transfer was a “preferential transfer” and demanding that you return the money. However, before you get out your checkbook, you should know that not all payments made during this period qualify as preferential transfers and that there are several defenses available against this claim. For instance, if the payment is made in a contemporaneous exchange where new value is given to the debtor or if the payment is made in the ordinary course of business, such a transfer is usually not avoidable in bankruptcy. Other defenses may also apply.  Please contact Mark Jensen or Mitch Rothenberg if you would like assistance retaining such payments.