Venue/Jurisdiction

Section 547(c)(2)(A) of the Bankruptcy Code, often referred to as the “subjective OCB defense,” provides a defense to a preference suit if the defendant can show that the challenged payments made during the 90-day preference period are sufficiently consistent with the historical payments made by the debtor to the defendant.

hhgregg and the Potential Impact of Payment Pressure on an Otherwise Airtight OCB Defense

Trade creditors will undoubtedly want to take steps to protect themselves when dealing with financially distressed customers that are potentially heading toward bankruptcy — such as by decreasing credit limits, tightening payment terms or otherwise ramping up collection efforts. However, those same steps may come with the unintended consequence of compromising a creditor’s ordinary-course-of-business defense in the event that the customer files bankruptcy and the creditor is sued for a preference claim. This catch-22 was recently exemplified by a January 2022 decision in the U.S.

U.S. Trustee Does Not Have Unilateral Authority to Deviate from a Bankruptcy Court’s Order, but Can the U.S. Trustee Disband a Creditors’ Committee?

Under the Bankruptcy Code, the U.S. Trustee [1] has the power to appoint a committee. [2] Section 1102(a)(1) of the Bankruptcy Code requires U.S. Trustees to appoint a committee of creditors holding unsecured claims in all cases “as soon as practicable after the order for relief....” [3]

Target of Lawsuit Doesn’t Have Standing to Appeal a Litigation Funding Agreement

The Eleventh Circuit explained how prudential (or ‘person aggrieved’) standing is a higher standard more difficult to meet than constitutional (or ‘Article III’) standing.

Court :

11th Circuit

Texaco’s Plan in 1988 Wasn’t Grounds for Removal to Federal Court, Fourth Circuit Says

In a case that may be headed to the U.S. Supreme Court at least once more, the Fourth Circuit is subjecting 26 multinational oil companies to the tender mercies of the Maryland state courts.

Court :

4th Circuit