Looking at the Cadence Innovation November 30, 2008 balance sheet, you would see total assets of $88 million. The December 31, 2008 balance sheet shows total assets of only $6.5 million. What happened?
Mass Bankruptcy Preference, Avoidance Actions, Adversary Proceedings
Recent bankruptcy preference actions and adversary proceedings illustrating treatment of most aspects of bankruptcy preference assessment, negotiation and defense, including issues of timing and strategy.
Circuit City Liquidation – Preliminary Bankruptcy Preference Assessment
On November 10, 2008, Circuit City Stores, Inc. (“Circuit City”) filed for reorganization relief under Chapter 11 of the United States Bankruptcy Code. Slightly more than two months later Circuit City announced abandonment of its plan to reorganize. Instead, Circuit City will liquidate all of its assets.
What does this liquidation of Circuit City mean in terms of the potential for bankruptcy preference claims?
We have looked at the financial and other public information available. Our preliminary assessment is that the Circuit City liquidation has the potential create a massive number of bankruptcy preference claims.
Retailer 99 Cent Stuff Inc. – Final Set of Preference Actions Filed
In what has aready been a very active case for Adversary Proceedings for recovery of bankruptcy preferences, the plan trustee for 99 Cent Stuff, Inc. filed 13 more banrkuptcy preference actions this week, including 7 today.
DESA LLC Bankruptcy Filing May Give International Spin to Bankruptcy Preference Claims
DESA LLC filed for Chapter 11 Bankruptcy Protection on Decemter 29, 2009. DESA is leading manufacturer of heating products and power tools.
The bankruptcy is in its earliest stages. It has yet to been seen what reclaimation actions will be filed.
The list of DESA’s 35 largest unsecured claims, identifies companies in China(3), Hong Kong(2) and Taiwan. Three of the five top unsecured creditors are Asian.
Cadence Innovation LLC – Decision to Liquidate Means Preference Claims are Coming
Original Post 12/28/2008; See Updates At End of this Post
For a supplier confronted with a customer bankruptcy, nothing changes bad to worse like the failure of the customer to successfully reorganize. This means that a filing under Chapter 11, which creates the possibility that the customer will continue operations, now becomes a liquidation under Chapter 7. Worse still, the supplier who has received payments on open account during the bankruptcy preference period will likely face a bankruptcy preference claim and faces the real prospect of receiving a demand for repayment of those amounts.