For generations, federal bankruptcy law has given trustees and debtors-in-possession (collectively, for simplicity, trustees) in Chapter 7 liquidation and Chapter 11 reorganization cases the power to “avoid,” or invalidate, certain pre-bankruptcy preferential transfers and to add the recovered proceeds to the bankruptcy estate.
Bankruptcy Preferences: They Haven't Gone Away
A recent case, <i>O&G Leasing, LLC v. First Security Bank</i> provides a timely reminder to lenders that the power to avoid preferences remains a potent and oft-used weapon in the trustee's arsenal.
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