Preferences: Do I Really Need to Give the Money Back?!

Presented by

David Lerner of Plunkett and Clooney

About this talk

One of the most frustrating aspects of bankruptcy proceedings are preference lawsuits filed by bankruptcy trustees or creditor committee/liquidating trust in Chapter 7 and 11 cases. It is bad enough that the creditor does not get paid for its goods or services rendered, the debtor may retain property without paying for it, the debtor can reject contracts and compel the creditor to comply with the contract while the debtor does not need to comply but it is adding insult to injury to be told by the trustee or liquidating trust that not only are you not being paid in the bankruptcy case (or being paid pennies on the dollar) but that you actually need to give money back because you received a "preference." The underlying policy behind a preference is to hypothetically equalize treatment between creditors.

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