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Home Case Studies Transfers Subjectively and Objectively Ordinary; Clawback Dropped

Transfers Subjectively and Objectively Ordinary; Clawback Dropped

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Before filing for bankruptcy, Debtor was a truckload carrier that provided shipping services across the U.S. and neighboring countries. Our client, the Defendant, is a North American refrigerated, flatbed, tanker, and intermodal trucking company.

After the Debtor’s filing, Plaintiff filed a suit against the Defendant to recover $460,058.72 as alleged preference conveyances.

We conducted an in-depth analysis of the parties’ business and found that the transfers in question were consistent with the prior course of dealings between them. Based on our analysis, there was only a difference of six days between the range of payments in question and the historical payments between the parties. We showed that several courts consider such a slight difference as negligible with controlling precedents. Furthermore, compared to the industry standards, the business terms of the transfers in question were within the limits of the normal industry practices, in particular, the industry of the creditor. Based on our analysis and relevant precedents, we proved that the transfers fell within the norms of the general freight trucking industry.

Finally, we also showed a substantial amount of new value extended after the first allegedly preferential transfer, which may be set off against the transfers in question.

Based on the strength of our defenses, Plaintiff decided to drop his claims against the Defendant for no payment.

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Jones & Associates

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