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Home Case Studies Steel Fabricator Successfully Defended Against Preference Clawback

Steel Fabricator Successfully Defended Against Preference Clawback

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Jones & Associates successfully argued the case for the defendant and convinced the Trustee to dismiss the adversary proceeding for no payment. The debtor was a leading provider of metal fabrication services and offered drums, reactors, thermal oxidizers, engineering, and designing services. We represented the defendant, which is engaged in the business of steel fabrication and steel distribution.

Our client has been providing welding and filter services to the debtor since 2016 and has continued to do so during the preference period. The Trustee sought to avoid and recover the defendant’s payments as preference transfers.

According to the agreement signed by the parties, the defendant was to be paid immediately after the provision of service. Using the range of payments test as a measuring stick, we argued that 5 out of 6 invoices during the preference period were paid within the range of payments in the base period. The defendant neither engaged in unusual collection practices nor was aware of the debtor’s deteriorating financial condition, let alone taking its advantage. Our position statement prepared successfully established that the defendants supplied new value to the debtor after receipt of the alleged preferential transfers.

Our arguments convinced the Trustee to dismiss the case for no payment

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Jones & Associates

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