On March 28, 2014, AFA Investment Inc. filed approximately 125 complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code, to disallow claims of the defendants pursuant to Section 502(d), and seeking attorneys' fees. AFA Investment Inc., and various affiliated entities (the "Debtors") filed petitions for bankruptcy in the District of Delaware on April 2, 2012.
By way of background, on July 2, 2013, the Court approved an Order approving the formation of an Advisory Committee for the purposes of management of prosecution of avoidance actions. The Court confirmed the Debtors' First Amended Joint Chapter 11 Plan of Liquidation on March 7, 2014.
The law firm of ASK LLP represents the Debtors in these various preference cases. The pretrial conference has not been scheduled. These adversary actions, as well as the Debtors' bankruptcy proceeding, are before the Honorable Mary Walrath. To review one of the complaints filed in these actions, click here.
For readers looking for more information concerning preference litigation, including an analysis of defenses that can be asserted, below are several articles on this topic:
Preference Payments: Brief Analysis of Preference Actions and Common Defenses
Minimizing Preference Exposure: Require Prepayment for Goods or Services
Minimizing Preference Exposure (Part II) – Contemporaneous Exchanges
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
