How Valuable Is 'New Value' In Preference Litigation?

Law360, New York (August 8, 2012, 1:14 PM EDT) -- It is not uncommon for a supplier of goods or services to receive a demand letter or adversary complaint alleging that it received avoidable transfers — commonly known as "preferential payments" or "preferences" — during the 90 days preceding a customer's bankruptcy filing. Such claims arise under section 547 of the Bankruptcy Code, and can result in a supplier having to return certain payments made during the 90-day preference period.

One of the most common defenses to an alleged preference is the "new value" defense.[1] Simply...
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