Preference and fraudulent transfer defense
A bankruptcy trustee can demand that a creditor return payments it received from the debtor before the bankruptcy. Those claims can often be defeated, or settled for significantly less.
What is a preference?
A preference is a payment on an existing debt made within 90 days before the bankruptcy filing, or within one year if the creditor is an insider. The trustee can sue to recover the payment for the bankruptcy estate, even though it paid a legitimate debt.
Common defenses
- Ordinary course. The payments were made in the ordinary course of business, consistent with past dealings or industry terms.
- Subsequent new value. You provided goods or services after the payment and were not paid for them.
- Contemporaneous exchange. The payment was made at the time of delivery, as in a C.O.D. sale.
- Solvency. The debtor was solvent when it made the payment.
Both sides of the caption.
The firm has litigated bankruptcy matters for debtors, trustees, creditors and transferees. We handle:
- Demand letters and lawsuits to recover preferential or fraudulent transfers
- Objections to proofs of claim
- Adversary proceedings objecting to a debtor’s discharge or to the dischargeability of a particular debt
If you have received a preference demand, call 508-543-0040 before you respond.
On the Chapter 7 trustee panel since 1997.
- Chapter 7 trustee, District of Massachusetts, since 1997
- Involved in more than 750 bankruptcy cases a year as trustee and as counsel to debtors
- Named a Massachusetts Super Lawyer every year from 2005 through 2026
- AV Preeminent rating, Martindale-Hubbell
- Member, American Bankruptcy Institute
- Lecturer, Massachusetts Continuing Legal Education
- Quoted in The New York Times, The Boston Globe, the Boston Herald and The Providence Journal, and a guest on FOX 25 Boston
Talk to us before you decide anything.
No obligation and no cost for an initial meeting. You may or may not become a client, and that’s okay. We’ll point you in the right direction.
PHONE508-543-0040
EMAILmadoff@mandkllp.com
OFFICEPine Brook Office Park
124 Washington St., Foxborough, MA 02035
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