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Defending Preferential Payments in Ordinary Course of Business Defending Preferential Payments

Most practitioners in the Eastern District have encountered the client who is a creditor and has been served with a summons and complaint brought by a trustee for the recovery of a preferential payment.[1] A preferential transfer or “preference” is a transfer that is made to a creditor by a debtor within the 90-day period preceding the bankruptcy filing and is in payment of an antecedent debt that enables the creditor to receive more than it otherwise would under a Chapter 7 liquidation.

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