b'Alls Fair in Love and Bankruptcy Team Publicationsclaim allows a bankruptcy trustee to unwind certain transfersCommunication is a key component of our direct style of representation and adds to our value proposition to our clients. Our lawyers are Aylix K. Jensen of assets a debtor made shortly before the debtor files forrecognized as thought leaders, prominent speakers, commentators, and authors on platforms, venues, and publications across the nation and 612-877-5434|Aylix.Jensen@lawmoss.com bankruptcy and recover those assets for the eventual distributionworldwide. Here are two publications we would like to highlight:LawMoss.com/people-aylix-k-jensen to all creditors. Aylix is a member of our Financial Services team. She defendsThe Debt Collection Drill The Safe Harbor: Debt Collection Law marketplace lenders, collection agencies, creditors, and otherThe rationale for preference avoidance is twofold. First, theJohn Rossman and Mike PoncinUpdate by Aylix Jensenbusinesses in consumer litigation.Bankruptcy Code seeks to promote equality between similarlyhave turned their long-running situated creditors (e.g., secured creditors, unsecured creditors,audio blog, The Debt Collection Sarah E. Doerr bondholders, etc.). Second, the trustees ability to claw backDrill, into a videocast series. 612-877-5297|Sarah.Doerr@lawmoss.com assets transferred in the months leading up to a bankruptcyJohn and Mike provide sage tips LawMoss.com/people-sarah-e-doerr disincentivizes creditors from trying to convince a struggling entityand ongoing intelligence for to pay it ahead of other creditors. debt professionals. They review Sarah practices in Financial Services and Litigation, focusing on creditors\' remedies and creditor-side bankruptcy issues. What is a Savvy Creditor to Do? detailed tactics on emerging issues in the credit industry andAylix Jensen offers analysis and insights Consider the following scenario: You are a creditor who lendsUnder Section 60(b) of the Bankruptcy Act of 1898, preferenceprovide their analysis and solutionsfor the debt collection industry in her $100,000 to a debtor on an unsecured basis. Ten years later, therecovery required that a creditor receive a transfer withto the challenges the collection industry faces daily. All videomonthly newsletter, The Safe Harbor: debtor repays the $100,000 loan to you. Shortly thereafter, thereasonable cause to believe that the debtor is insolvent. Thisand audio from the The Debt Collection Drill is available on theDebt Collection Law Update by Aylix debtor files for bankruptcy. You subsequently receive a letterchanged with the enactment of the Bankruptcy Reform ActMoss & Barnett website. Jensen. This monthly newsletter provides from the debtors bankruptcy estate demanding the return of theof 1978. Under todays Bankruptcy Code, if a creditor receivesThe new video seriesan update of changes and developments $100,000 payment, which was made by the debtor within 90a payment that fits the statutory definition of a preferentialis also available onin the law that impact the debt collection days preceding the debtors bankruptcy petition date. The letterpayment, the bankruptcy trustee may recover the payment,YouTube, and pastindustry. It highlights new debt collectionAylix K. Jensenthreatens litigation unless a resolution is reached.irrespective of whether the creditor acted with suspicious intent. episodes of The Debtlaws and practices, discusses what these may mean for the This strict liability framework is, in practice, much more nuanced.Collection Drill audiocollection industry, and provides tips to ensure compliance. The Bankruptcy Code refers to these pre-bankruptcy payments asblog can be found onAll editions of The Safe Harbor are found on our website.preferential transfers. While it may seem patently unfair, absentThe Bankruptcy Code provides for a number of defenses that aJohn Rossman Michael S. Poncincreditor may invoke to prevent the trustee from clawing backApple Podcastsa defense, a bankruptcy trustee can recover or claw back these payments for the benefit of the bankruptcy estate while you, thepayments made during the preference period. Among the most commonly used is the ordinary course of business defense, whichWe provide timely updates and analysis across all the legal disciplines in which we practice. Let us know what interests you creditor, are left holding the proverbial bag. by subscribing to our publications at LawMoss.com. prevents a trustee from recovering otherwise preferential payments What is a Preferential Transfer? if the creditor can show the debtors timing and pattern of payment Preferential transfers are defined in Section 547 of the Bankruptcydid not change from the pre-petition status quo. "Alls Fair in Love and Bankruptcy" Continued from Page 8Code. Section 547(b) allows a bankruptcy trustee to unwindCreditors also often invoke the defense that the transaction was certain transactions that take place in the 90 days preceding afor goods or services immediately received (rather than pursuantA Preference Demand Is Rarely Cause for Panicdebtors bankruptcy filing, the preference period. The principleto an extension of credit), sometimes termed a contemporaneousBankruptcy trustees typically make demands to all recipients of transfers within the 90-day lookback period without considering underlying the statute is that individual creditors should notexchange for new value. A creditor may assert a similar defensewhether a defense to preference liability exists. Should you receive a demand or a complaint filed in Bankruptcy Court for return of receive more than their fair, pro rata, share of a debtors limitedwhere the creditor provided the debtor with subsequent newan allegedly preferential payment, please reach out to Moss & Barnett. Our bankruptcy attorneys can quickly determine whether assets when a debtor is approaching bankruptcy. A preferencevalue for which it was never paid. the payments in question are indeed preference payments and which of the statutory defenses are best suited to the facts at hand. 8 "Alls Fair in Love and Bankruptcy" Continued on Page 9 These demands and lawsuits can nearly always be settled prior to prolonged litigation. 9'