Jones & Associates’ Subsequent New Value Argument Entirely Wipes Out Plaintiff’s Preference Clawback, Defendant Pays Nothing
Debtor was a New Hampshire based technology company producing innovative crystal growth equipment for the global electronics, solar, and LED industries.
The Defendant, our client, is a California based company and provides parts and components made of different materials like brass, copper, plastic, etc. used in various industries such as aerospace industry, construction industry, or those used by artists. Our client supplied parts and components to the Debtor for its use in its production units.
After the Debtor filed for bankruptcy, the Trustee sued the Defendant to avoid three check payments made by the Debtor totalling $15,178 as allegedly preferential and fraudulent payments.
We compared the Defendant’s payments received in the preference period with those received in the two years prior. We proved that there is nothing unusual about preference period payments that fall within the historical range of payments and that were received only 11 days earlier on an average as compared to the payments in the historical period.
The clinching evidence was that Defendant shipped products to the Debtor in the amount of $31,758 after the first preferential transfer. We proved that this amount still remained unpaid and could be completely set-off from the total claim in question.
Lastly, we proved that the transfers were exchanged for reasonably equivalent value and per contractual terms between the parties. Therefore, the Plaintiff’s fraudulent claim also fails.
Based on the strength of our position statement, the Plaintiff dismissed the case for no payment.