Dismissed For No Payment
September 22, 2017, Delaware – The defendant, our client, in this case, was engaged in the business of manufacturing and selling homecare products such as toothpaste, soaps, shampoos, etc. The Plaintiff initiated a preference action against our client to recover an amount of $50,327 as alleged preferences. We submitted our position statement to the Plaintiff, arguing that the alleged transfers were protected from avoidance under an ordinary course of business defense and subsequent new value defense. We presented the facts and showed that there was significant consistency between the ranges of the payment made during the historical and the preference period. Based on our analysis, we successfully established the debtor typically paid within 21.76 days during the base period and in 20 days during the preference period. So, a difference of less than two days between the base period and the preference period payment averages fell well within what many courts have found as ordinary and immune from a trustee’s avoidance powers. Based on our strong arguments in the Position Statement, the plaintiff dismissed the case for no payment.