On November 10, 2005, Rep. Michael E. Sodrel (R-In) introduced H.R. 4296 (named the Innocent Supplier Fairness Act) in the House of Representatives. This bill would amend the Bankruptcy Code with respect to avoidable preferences. If passed, the bill would benefit creditors in defending against trustees or debtors seeking to avoid preferential transfers. The bill would create a statutory presumption in favor of the defendant. That is, barring proof that the defendant is especially close to the debtor, until the plaintiff in the avoidance suit can disprove the defenses available under Sect. 547(c), those defenses apply. The text of the proposed subsection (j) reads as follows: (j) For the purposes of this section, the creditor or party in interest against whom recovery or avoidance is sought is presumed to have carried the burden of proving the nonavoidability of a transfer under subsection (c) unless the trustee proves that such creditor or such party is an insider or that the debtor has a special relationship with such creditor or such party that consists of-- `(1) common ownership of the debtor and such creditor or such party; `(2) common management of the debtor and such creditor or such party consisting of overlapping senior management or directors; `(3) explicit notice from the debtor to such creditor or such party that the filing of a petition is contemplated or imminent before the date of the transfer; or `(4) the use by such creditor or such party of judicial process, in the 90-day period ending on the date of the filing of a petition, against the debtor to collect a debt with respect to which a transfer described in subsection (b) may have been made. Further, the bill would amend Title 28 of the U.S. Code, Section 1409(b) so that all preferential transfer avoidance actions could only be brought in the district court for the district in which the defendant resides. This change expands the recently amended Section 1409(b) which provides that any preference avoidance action seeking recovery less than $10,000 must be brought in the district where the defendant resides. The complete text may be viewed at the Library of Congress - Thomas: http://thomas.loc.gov/ Ray