One of the most critical but often overlooked opportunities to defend bankruptcy preference claims regards the ability to apply multiple defenses when there have been multiple payments. This ability to mix and match defenses means that the supplier’s exposure to bankruptcy preference claims can be reduced.
In the initial demand letter coming from the customer’s bankruptcy representative, a supplier may see an acknowledgment of and even “credit” given for one of the bankruptcy preference defenses. This may give the impression that all of the defenses have already been considered. This impression may or may not be true. We have seen opportunities in the past to stack preference defenses and thereby substantially reduce or even eliminate a bankruptcy preference claim.
In the above video, we review the mixing and matching of defenses in the case of multiple payments in the preference period.