Preference And Fraudulent Transfer Litigation
A significant portion of our bankruptcy litigation practice frequently involves preference and fraudulent transfer litigation. We represent creditors, debtors, trustees and other parties in litigation involving claims of preferential payments under Section 547 of the Bankruptcy Code and fraudulent transfers under Section 548 of the Bankruptcy Code and state law.
Individuals and businesses who receive payments from a debtor before a bankruptcy filing may be sued for the return of those payments in a lawsuit called a “preference action”. We routinely help individuals and business owners defend these actions by learning about the business relationship between the parties and asserting applicable defenses in the litigation process such as the ordinary course of business defense and the new value defense.
Similarly, individuals and businesses may be sued for fraudulent transfer claims. Fraudulent conveyances claims can either be for actual or constructive fraud. Actual fraud alleges intent to defraud creditors by transferring property. Constructive fraud involves a debtor receiving less than the equivalent value for the transfer while the debtor is unable to pay its debts at the time or as a result of the transfer. Our attorneys review and analyze our clients’ relationship with the debtor prior to bankruptcy and then prepare appropriate defenses to the claim.
Because we represent bankruptcy trustees, we understand the strategy commonly employed in preference and fraudulent transfer cases and are frequently able to resolve the case without a trial. Our goal is to negotiate an efficient and economical resolution of the claims, however when necessary, our attorneys aggressively litigate on our clients’ behalf through trial.
The bankruptcy process and resulting litigation in the bankruptcy court requires a team of lawyers with the knowledge and experience to aggressively advocate on your behalf. We have a reputation of assertive perseverance in bankruptcy litigation and are prepared to use these tools to fight for your rights in bankruptcy court.
Please review our Business Litigation and Creditors’ Rights pages for additional information that may be relevant to parties interested in our Bankruptcy Litigation practice.