When auto parts supplier Visteon Corp. filed for Chapter 11 reorganization, the company knew it wouldn’t be able to continue to pay the hourly rates charged by its pre-petition patent enforcement counsel, Alston & Bird.
Alston & Bird, for its part, knew that the nearly $300,000 in legal fees and expenses it had received in the 90 days prior to the bankruptcy filing could be deemed an “avoidable transfer” under the Bankruptcy Code, according to court documents-meaning that a court could find that the firm received preferential payment and order recovery of that payment for equitable distribution among other creditors.
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