Change of Venue for Preference Defendants

(June 6th, 2005 under Announcements)
With the swing of the proverbial pendulum in the favor of creditors under the newly-enacted Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Reform Act"), some preference defendants will be able to litigate preference claims in a forum that is closer to home. Beginning on October 17, 2005 any preference suit to recover non-consumer, non-insider payments of less than $10,000 must be brought in the district court where the defendant resides. See 28 U.S.C. ?1409 (b). Furthermore, in a non-consumer case, a Trustee (or debtor-in-possession) may not avoid transfers in an aggregate amount of less than $5,000. See 11 U.S.C. ?547(c)(9). This effectively creates a safe harbor for transfers to a creditor during the 90 day preference period that total less than $5,000. Leslie Ricketts

This entry was posted on Monday, June 6th, 2005 at 9:41 am and is filed under Announcements.


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