Now that the ordinary business terms defense stands on its own as an independent defense, courts are compelled to focus specifically on whether the ordinary business terms test has been satisfied. As before, the burden is on the creditor to establish […]
Energytec owned a pipeline system. Newco Energy had an agreement with Energytec whereby Newco was paid a “transportation fee” based on the amount of gas that flowed through the pipeline. Energytec filed Chapter 11 bankruptcy and […]
Under the pre-October 2005 version of Bankruptcy Code section 547(c)(2), a creditor wishing to shield a transfer from avoidance using an "ordinary course" defense had to prove, by a preponderance of the evidence, that the preferential transfer was: ( […]
Credit managers are generally familiar with the "ordinary course of business" and "new value" defenses, which receive the predominant amount of attention in print and case authority. However, the ordinary business terms defense can be just as effective […]
Cadle Co. sued James Moore, Brunswick Homes and others in state court alleging that Moore used Brunswick to shield assets and to avoid paying debts to Cadle. The causes of action included a state-law fraudulent transfer action. Moore subsequently […]
When a company files bankruptcy, trade creditors are frequently left in financially vulnerable positions. Trade creditors are generally unsecured, and frequently receive only pennies on the dollar from bankrupt debtors' estates. We are frequently […]
Creditors face any number of perils when an account debtor files for bankruptcy – loss of sales, likely risk of collection of amounts owed, legal fees and more. One more challenge a creditor might encounter is a possibility the now-bankrupt debtor […]
The difficult economic circumstances of the last few years have affected employer/employee relationships in a number of different ways. One of these effects has been that fewer employees changed jobs. During a period of high unemployment, […]