Section 547

From January 23-27, 2015, Charles A. Stanziale, Jr., as the Chapter 7 Trustee (the “Trustee”) of Powerwave Technologies, Inc. (“Powerwave” or the “Debtor”), filed approximately 102 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code.

Background

On October 17, 2014, Charles M. Forman, the Chapter 7 Trustee of the Satcon Technology Corp. bankruptcy estate, filed a number of complaints seeking the avoidance and recovery of alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code.  To review a prior post concerning the filing of these complaints, click here.

In a prior post, we discussed that a number of preference actions were filed in the MCG Limited Partnership, et al. bankruptcy proceeding by the Chapter 7 Trustee.  Since this post, an additional 93 preference complaints were filed, bringing the total to 131.

From April 22 – 24, 2014, Jeoffrey L. Burtch, Chapter 7 Trustee of the Capitol Infrastructure, LLC bankruptcy estates, filed approximately 71 complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code, and to disallow claims of the defendants pursuant to Section 502(d).

It’s your worst nightmare: you provided goods and services to a financially struggling company, only to find out that it filed for bankruptcy, leaving your company with a large unpaid balance.  Worst yet, after the debtor filed for bankruptcy, you receive a demand letter in the mail threatening a lawsuit if you do not return payments that you received from the debtor, even though you earned that money by providing goods or services to that entity.  What sense does that make?