Bankruptcy Preference – Bankruptcy Creditor Law & Bankruptcy Preference Defense

Lesser Known, Less Frequently Applied Defenses to a Bankruptcy Preference Claim

There are at least 9 defenses to an action to recover a bankruptcy preference.  We provide extensive discussion of the three most common defenses:

1. the contemporaneous exchange defense
2. the ordinary course of business defense
3. the subsequent new value defense

However, there are some lesser know defenses that work just as well and can be life savers in the right circumstances.  These lesser know defenses include:

1. the small commercial preference defense
2. the purchase money security interest defense
3. the state statutory lien defense;
4. the Section 365 executory contract assumption defense (also know as the Kiwi defense);
5. the “earmarking” doctrine; and
6. the “venue defense”.

The most common and lesser know defenses can be combined in a mix and match strategy that we discuss in a separate video presentation and posts on this website.

All of these defenses rely in whole or in part on the supplier’s books and records.

Click on the following links to see more articles on "bankruptcy preference, defenses and limitations ". First Published February 19th, 2009.