Case Settled for 4% of the Complaint Amount After Demonstrating Ordinary Course of Business and Subsequent New Value Defenses

The Debtors, a leading global beauty company, operate a diverse portfolio of brands and sell products in over 100 countries. The Defendant, a long-time vendor, supplied secondary packaging for the Debtors’ promotional and retail products.

After a decade-long business relationship, we demonstrated that the Defendant received consistent payments due to: 1) regular shipments and invoicing; 2) an unchanged payment process throughout the partnership; and 3) continued supply of goods after the first alleged preferential transfer.

We cited relevant case law showing that these transfers were made in the ordinary course of business and fell outside the Plaintiff’s avoidance powers. Additionally, we proved new value was provided by the Defendant after the first alleged transfer, which could offset the total claim.

As a result of these strong defenses, the Defendant reached a favorable settlement, avoiding lengthy litigation.

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