The Debtors operated a chain of retail stores throughout the United States, Guam, Puerto Rico, and the U.S. Virgin Islands. The Defendant sold various home consumer products to the Debtors on wholesale, which the Debtors would then resell at retail.
Plaintiff commenced an adversary proceeding against the Defendant, our client, by filing a complaint where Plaintiff sought to recover $579,305 as alleged preferential transfers.
We took a deep dive into the facts of the case and argued that the transfers in question fell in the historical range of payments. With prevailing precedents, we showed that such transfers are within the ordinary course of business between the parties by several courts. We also calculated the subsequent new value after the first allegedly preferential transfer to be around $262,488, which, when set off, would reduce the net preference claim to $341,372.53 in the unlikely event that the ordinary course of business defense does not hold up.
Based on the strength of our assertions, Plaintiff agreed to dismiss the case for no payment.