LITIGATION ALERT: KEEPING YOUR MONEY IN YOUR POCKET: Some Basics of Bankruptcy Preference Actions

In this troubled economy, no one wants to give up hard-earned cash.  Unfortunately, many companies are forced to do exactly that as the number of corporate bankruptcy filings increases.  When a company in financial turmoil files for bankruptcy, important changes take place that alter the relationship between the bankrupt company and the collecting creditor.  One of those changes allows the bankrupt debtor, or an appointed trustee, to review all payments made by the debtor during the 90 days before the debtor filed bankruptcy (the so-called "preference period"), and to prosecute a lawsuit in bankruptcy court to recover those "preferential" payments.

wpengine