Successfully Protected Creditor Payments Before its Customer’s Bankruptcy

Under bankruptcy law, payments received by creditors within 90 days prior to the bankruptcy filing are presumed to be a “preference” and are subject to claw back by the bankruptcy trustee.  For example, in one matter, the bankruptcy trustee sought to recover approximately $80,000 in payments received by the client within 90 days before the bankruptcy filing.  We were able to demonstrate that the some of the payments were not preferential payments and that other payments were otherwise exempt from the claw back.  The matter was resolved without a trial.