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Home Case Studies J&A’s Ordinary Course of Business Defense Hits The Trustee’s Clawback Claims Out of The Park

J&A’s Ordinary Course of Business Defense Hits The Trustee’s Clawback Claims Out of The Park


Debtors were a leading food and beverage company and the largest processor and direct-to-store distributor of fresh milk fluid and other dairy and dairy case products across the United States. Our client, the Defendant, is a Nevada-based milk processing and distribution company.

After the Debtors filed for bankruptcy, the Trustee sued the Defendant to avoid and recover $80,698.10 as alleged preferential and fraudulent transfers.

Upon analysis, we deduced that the transfers were made according to the parties’ agreement and were consistent with the parties’ prior course of dealings. We argued that Defendant’s allegedly preferential transfers fall within the base period range. The overall averages between the base period and preference period payment averages are only five days apart. A similar payment pattern is what several courts have found as ordinary and inconsequential.

For the alleged fraudulent transfers, we argued that Debtors received reasonably equivalent value in its exchange as the transfers were made according to contractual terms and were all made in consideration of the goods supplied by the Defendant.

Based on our strong Position Statement, the Trustee dismissed the case for no payment.


Jones & Associates

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