Bankruptcy Preference Defense: Expert Witness v. Not only is the preference provision the most litigated of bankruptcy's avoiding powers, it can unwind a host of settled commercial transactions. Reclamation of such payments is intended to redistribute the bankruptcy estate's assets equitably among all of the unsecured creditors. It doesn't seem fair does it? ![]() As a practicing credit professional, you extended credit to a customer (debtor) on behalf of your employer. Your customer never disputed the account balance due your employer. Yet, after your customer files bankruptcy and you filed your proof of claim with the proper court, you are suddenly confronted by a demand letter from the Trustee, counsel for the Debtor In Possession (DIP) or counsel for an unsecured creditor's committee, seeking repayment of all monies received from your customer within the ninety (9. Therefore, all payments and transfers made to creditors by the debtor during that period are suspect. Section 5. 47 provides that the trustee may avoid (set aside) transfers of the debtor's interest in property: to or for the benefit of a creditor; for or on account of an antecedent debt owed by the debtor before such transfer was made; made while the debtor was insolvent; made - (A) on or within 9. B) if the creditor was an insider, on or within one year before the date the petition was filed; andthat enabled the creditor to receive more than the creditor would have received if - (A) the case were a case under Chapter 7 of the Bankruptcy Code; (B) the transfer had not been made; and (C) the creditor received payment of such debt to the extent provided by the provisions of Chapter 7. To recover a preference, the Trustee, DIP or Creditor's Committee must establish all five elements. In the event all five elements cannot be proven, a preference has not been established and no recovery can be made. However, if all five elements are established, creditors have a number of defenses that can be raised to eliminate any liability. As maddening as it can be, . As many credit professionals have learned, their first notice of a preference action is receipt of a demand letter from a Trustee, DIP or creditor's committee. Such a demand generally includes the debtors name, your account number, totally dollar amount of payments made during the preference period or value of any goods returned, check numbers, check amounts and invoices being paid. The demand letter will also state the period to time in which the preference is to be repaid (grace period) before any litigation action is commenced. At this point, the credit professional must make a decision: pay the amount of the demand; attempt to negotiate a settlement for a lesser amount, or hire outside counsel to mount a defense against the preference claim. Such a decision will most likely be driven by the dollar amount of the preference claim. In the case of a preference claim for $1. This element is often referenced as the . This element is often referenced as the . The National Association of Credit Management (NACM), through its qualification and testing program, has certified ninety- two (9. This Handbook is designed to assist practitioners and credit professionals in evaluating the available defenses that may be asserted in a preference avoidance action. Preference Defense Handbook 181602 Download : Preference Defense Handbook 181602 PDF Are you looking for Ebook Preference Defense Handbook 181602 PDF? Certified Expert Witnesses. Individual credit professionals who meet all qualification and testing requirements are . The CEW's activities may include, but not be limited to the following: 1) reviewing the business transaction history between creditor and debtor; 2) reviewing payment history between creditor and debtor for the preference period as well as the ninety days prior to the preference period - including a review of payment terms, invoices and copies of checks received from the debtor, usually through a lockbox system . Such report may include, but not be limited to the following: 1) Statement of engagement; 2) Explanation of the scope of engagement; 3) CEW's CV outlining his or her business, professional and educational experience; 4) details of activities in carrying out the engagement; 5) copies of all pertinent documents (exhibits) supporting the report; 6) summary and opinion in support of ordinary course of business defense. While fulfilling the terms of their engagement, the CEW should keep in mind that the Trustee, DIP or Creditor's Committee counsels will more than likely be engaging their own . Expert witnesses hired by the plaintiff may well be other CEWs. However, it has been this writer's experience that most such witnesses are public or certified public accountants. This is not to infer that an expert witness who is not . It has been this writer's experience however, that expert witnesses who are not professional credit practitioners may not be familiar with the nuances of the creditor- debtor relationship or industry in which they do business. The assignment of the plaintiff's (debtor) expert witness is similar to that of the defendant (creditor); develop support for their preference claim. In anticipation of the preference claim proceeding to trial, both expert witnesses will be subject to deposition conducted by opposing counsel. The primary purpose of the deposition is to question the expert witness regarding his or her professional and educational background; scope of the engagement and fees to be paid; experience in bankruptcy matters; experience with specific types of customers and industries; methodology used in developing their report and opinion; documents reviewed, and individuals interviewed. Answers to questions posed by counsel conducting the deposition also give them insight into the viability of the opposition's defense. During the deposition, counsel accompanies the witness being deposed. However, while opposing counsel may object to questions . At the end of the deposition, counsel representing the expert witness has the opportunity to ask questions to correct or clarify answers previously given by the witness. Although depositions are generally conducted in a 'non- adversarial' atmosphere, the expert witness being deposed must maintain his or her professional composure at all times, despite opposing counsel's attempts to upset or confuse them. Remember, it is opposing counsel's job to attempt to discredit you as an . Of Preference Defense Handbook in digital format, so the resources that you find are reliable. There are also many Ebooks of related with this subject. Preference Defense Handbook: The Circuits Compared, Second Edition (English Edition) eBook: Deborah L. Becket: Amazon.es: Tienda Kindle. Preference Defense Handbook is available for download from iBooks. Preference Defense Handbook: The Circuits Compared, Second Edition. Updated by one of the original authors, Deborah Thorne (Barnes & Thornburg LLP; Chicago), the. ![]() This is an oppor- tunity for opposing counsels to expand on questions posed during the deposition, to review documents and other information contained in your report, and possibly to introduce additional evidence. Creditors should never ignore a preference demand. Nor, should a preference demand be feared. Rather, it should be considered as an opportunity for the creditor to fully utilize the defenses available to them under the Bankruptcy Code. Include a Certified Expert Witness on your defense team. PREFERENCE DEFENSE HANDBOOK 181602 PDF may not make exciting reading, but PREFERENCE DEFENSE HANDBOOK 181602 is packed with valuable instructions, information and. It is just good strategy. ABI Preference Handbook, 2. Page iii. 2. ABI Preference Handbook, 2. ![]()
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