Preference and Fraudulent Transfer Claims Dismissed After Ordinary Course and New Value Defenses

A Chapter 7 trustee for a national home goods retailer filed suit against a retail facility maintenance and construction services provider to recover $104,647.80 in alleged preferential transfers under section 547, with an alternative constructive fraudulent transfer claim under section 548. The challenged payments, all made within the 90‑day preference period before the bankruptcy filing, compensated the provider for ongoing maintenance services at store locations nationwide.

Our firm submitted a detailed position statement asserting three key defenses: an ordinary course of business defense under section 547(c)(2), a substantial subsequent new value defense under section 547(c)(4), and a reasonably equivalent value rebuttal to the section 548 claim. The payment history showed that every preference‑period transfer fell within the historical range, payment method remained consistent via ACH, Net 30 terms were unchanged, and there was no unusual collection activity or awareness of financial distress. Statistical analysis further demonstrated that roughly 87.84% of the preference‑period payments—totaling $91,919.42—fell within one standard deviation of the historical average. In addition, the provider continued to perform post‑payment maintenance work, generating $146,700.58 in subsequent new value, exceeding the total preference demand by over 140% and independently confirming reasonably equivalent value.

After reviewing this analysis, the trustee agreed to dismiss the adversary proceeding without any settlement payment. The result eliminated the entire $104,647.80 clawback exposure and validated the client’s ordinary‑course dealings with the debtor.

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