A New Jersey law firm must return $450,000 it was paid in shares of stock just before one of its clients filed for bankruptcy protection now that the 3rd U.S. Circuit Court of Appeals has ruled that the transfer was a “preferential payment” that is barred by the Bankruptcy Code.
The court also ruled that the law firm of Robinson St. John & Wayne is disqualified from handling the bankruptcy for First Jersey Securities Inc. because the payment of shares of stock in International Thoroughbred Breeders Inc. that was paid to the firm just one day prior to the bankruptcy filing gave it an interest adverse to the debtor’s estate.
