More Than One Way To Weigh Debtor's Insolvency

Law360 (April 14, 2008, 12:00 AM EDT) -- Under § 547 of the Bankruptcy Code, prebankruptcy preferential transfers of the debtor’s property or payments by the debtor made while insolvent may be recovered. As to the insolvency element of the cause of action, the Code establishes a rebuttable presumption of insolvency during the 90 days prior to the filing. 11 U.S.C. § 547(f).

If rebutted, or if the transfer was to an insider and occurred outside of the 90-day window, the plaintiff has the burden of proving insolvency under the guidelines of the Code’s...
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