Credit: Lane V. Erickson/Adobe Stock Three Things Bankruptcy Trustees Should Know About Due Diligence in Preference Litigation
Courts have struggled with the interpretation of the 2019 amendment to Section 547, specifically whether the due diligence requirement is an element of a preference claim that must be adequately pleaded in the plaintiff's complaint. While the law is still developing, there are three important takeaways for trustees to consider.
January 08, 2024 at 11:00 AM
6 minute read
Bankruptcy
Preference recoveries brought under Section 547 of the Bankruptcy Code are one of the main litigation tools that bankruptcy trustees, debtors-in-possession and liquidating trustees can use to bring additional funds into a bankruptcy estate. A preference action allows for the recovery of payments made by a debtor to a creditor shortly before bankruptcy that provided the creditor an advantage over other, similarly situated creditors.
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