The debtor was a duty-free retailer and wholesaler operating in North America and carried a
broad range of products from duty-free liquor and tobacco to non-alcoholic beverages and health
and personal care products. The defendant (our client) is a corporation engaged in the business of
arranging transportation of freight between shippers and carriers.
Our client provided the debtor with freight transportation services for the goods sold at their
establishments. The Trustee for the debtor brought a preference clawback action against our
Upon review, we found that the defendant’s invoices for its services had payment terms of Net
15 days. Despite the payment terms of the defendant’s invoices, the debtor would typically pay
late and would pay multiple invoices with one transfer. The average amount of invoices paid by
the debtor during the historical period was very close to the average amount paid during the
preference period. Our position statement justified the payments made during the preference
period on the argument that these payments fell within the range of payments made during the
historical period. We successfully demonstrated that the transactions during the preference
period fell within the ordinary course of business between the parties.
The Trustee voluntarily dismissed the case for no payment after reviewing all the
arguments in favor of the defendant.