Imagine that a client has paid you (or bestowed something of value to you) and then files for bankruptcy. Payments made before a bankruptcy filing may be subject to requests that the payments be turned over to either a bankruptcy trustee or sent back to the debtor making the payment.
Under the Bankruptcy Code, a trustee or debtor-in-possession is allowed to recover payments made within 90 days of a bankruptcy filing, because those payments provided to the creditor are seen as an advantage since other creditors won’t receive their payments. Thus, these are known as preference claims, the idea that there might be some preference of one creditor recipient over another. Simply put, a preference is a creditor’s payment receipt, showing the time period in which a payment is considered “preferential.”
But before you turn over the money as a creditor, Bernstein-Burkley’s Litigation team can help with preference defenses, as there are a number of claims creditors’ can employ so they might not have to give the money back.
Contact our team at Bernstein-Burkley today at 412-456-8100 to see how we can assist you in Litigation services.