Defense of Preference Suits

A large percentage of our work relates to defending our creditor clients in preference litigation. In that regard, we have developed a framework for the preparation of an accounting analysis of our clients' available preference defenses. This statistical analysis is used to convince plaintiffs of our client's defenses so that an appropriate settlement may be reached early in the case before the costs in both time and money escalate.

We have refined our methods of analysis to quickly give our clients an accurate idea of their potential liability, if any, and work to negotiate settlements quickly to avoid expensive litigation.

Representative matters include:

• In a large Chapter 11 bankruptcy case filed in Delaware, we represented a corporate client in a preference defense suit. We successfully negotiated a settlement that reduced our client's repayment obligation by over 70 percent of the amount sued for.

• Retained after a default judgment had been entered by the U.S. Bankruptcy Court in the Northern District of Illinois against one of our international corporate clients on a preference claim in an amount in excess of $120,000. We successfully obtained an order from the court vacating the default judgment.

• Retained ten months after an answer date in a preference suit to represent a South Texas doctors' group on a motion to enter a default against it. We successfully delayed entry of the default judgment providing time for a detailed claims investigation into the merits of the suit and defenses so that we were able to exonerate our client of all liability on a significant preference.

• Using an excellent mediation (an ex-bankruptcy Judge from Los Angeles), we mediated a long and complex matter to a successful conclusion. At mediation, held in Seattle, we reached a settlement for our client, an equipment lessor, in a preference claim where the demand was in excess of $600,000. Plaintiff in the case was a liquidating, trustee of a trust arising out of the Chapter 11 bankruptcy of a commercial airline company based in Alaska. The settlement involved a reduction in the preference and a solution of various motions to allow priority claims.

• In a preference action brought by a Trustee against our client concerning a Canadian transaction involving a shipment of gold, we convinced the Trustee to dismiss the entire preference (where the demand exceeded $800,000).

• Represented several telecommunication entities as creditors in bankruptcy proceedings, and as defendants in numerous preference matters.