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Home Case Studies Successfully Established That Preference Period Range Fell Within the Base Period Range of Payments

Successfully Established That Preference Period Range Fell Within the Base Period Range of Payments

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The Debtors are headquartered in Lacombe, Louisiana and are in the business of providing healthcare services. The Defendant, our client is the exclusive distributor in the USA of medical equipment, products instruments, disposable and consumable items, spare parts and accessories, related to hemostasis and coagulation. The parties conducted business pursuant to an instrument supply agreement. The plaintiff sought to recover payments, worth approximately $20k from our client, made during the 90 days before the Debtor’s petition date as preferential transfers.

Upon review, we found that all the payments were made within the preferential period and that the Defendant did provide subsequent new value to the Debtors in the amount of $ 19,057.95, thereby reducing the net preference claim to $345.79. Thus, we were successfully able to argue that the Plaintiff cannot avoid the transfers to the extent of the subsequent new value provided by the Defendant to the Debtors.

Next, based on our analysis, we established that the payments were made in the range of 11 to 192 days during the base period and in the range of 24 to 140 days during the preference period. We argued that the preference period range fell within the base period range of payments. Further, the mode of payment during both the base period and preference period also remained consistent. During both the periods, the Debtors made payments via check and credit card.

Based on our defenses in the position statement, the plaintiff agreed to dismiss the case for no payment.

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Jones & Associates

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