Trustee’s Burden for Preference Transfers: “Getting More Than in a 7” Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The fifth and final element that a trustee must prove in order to avoid a preference transfer is set forth in Section 547(b)(5) of the Code. Under this section, the trustee must prove that the creditor […]
Part 6: Preference Time Periods: The Beginning and the End Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The fourth element a Bankruptcy Trustee must prove in order to avoid a preference transfer seems to be the most commonly remembered by creditors because it defines the time periods for which a transfer can considered a […]
Part 5: Trustee’s Burden for Preference Transfers Made While Debtor Was Insolvent Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The third of five elements the Trustee must prove in order to avoid a preference transfer is set forth in Section 547(b)(3) of the Code. This Code Section requires that transfers within 90 days of […]
Part 4: Trustee’s Burden for Preference Transfers for or on Account of an Antecedent Debt Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The second element the Trustee must prove in order to avoid a preference transfer is set forth in Section 547(b)(2) of the Code. This Code Section requires that the transfer made by […]
Part 3: Just What Do They Mean? Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News Last time, we outlined the five elements of a preference claim that must all be met by the Trustee (or the one seeking to recover the preference claim). In the next few issues, we’ll look at the elements themselves and […]
Part 2: Preference Actions, Prove It, Mr. T Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The “double whammy” just hit you. One of your customers filed bankruptcy, causing you to look at a significant write-off, and now you just received a letter from Mr. Bankruptcy Trustee (“Mr. T”) requesting that you immediately return the […]
Part 1: The Double Whammy Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News Almost every credit manager has been faced with the “double whammy.” Your customer files bankruptcy and you are looking at a big write-off. You do your investigation and decide it’s a dead end and you bite the bullet. Weeks, months or years […]
The Domestic Support Obligation Exception Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News While the topics of alimony and support are not usually found on credit pages, it is necessary to give one the full view of Preference defenses. Under the Bankruptcy Reform Act of 1994, as amended by the Bankruptcy Abuse Prevention and Consumer […]
Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The Bankruptcy Code provides Creditors with a defense to a bankruptcy trustee’s preference action for transfers which constitute the fixing of a statutory lien. Specifically, Section 547(c)(6) states: (c) the trustee may not avoid under this section a transfer — (6) that is the fixing of a […]
Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News A Creditor holding a security interest in a bankruptcy debtor’s inventory or receivables may be able to avail itself to the defense provided for in Section 547(c)(5) of the Bankruptcy Code in order to defeat a bankruptcy trustee’s preference action. This section provides: (c)The trustee may not […]
Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News Another statutory defense available to creditors subject to a bankruptcy trustee’s preference action relates to transfers for subsequent new value. Bankruptcy Code Section 547(c)(4) provides: (c) The trustee may not avoid under this section a transfer — (4) to or for the benefit of a creditor, to […]
Robert S. Bernstein, Esquire Bernstein-Burkley, P.C. Creditworthy News The third statutory defense to a bankruptcy trustee’s preference action protects lenders who receive a purchase money security interest from a bankruptcy debtor. Section 547(c)(3) provides: (c) The trustee may not avoid under this section a transfer — (3) that creates a security interest in property acquired […]