Law360, New York (July 9, 2014, 12:38 PM EDT) -- Chapter 5 of the Bankruptcy Code governs the avoidance of certain transfers. This article will discuss preferences, which are a statutory cause of action arising under Section 547 of the Bankruptcy Code.
Preference targets are creditors such as trade creditors who did business on an unsecured basis with a troubled company that ultimately filed for bankruptcy. The look-back period is generally 90 days from the petition date for noninsider creditors and one year for insiders. While the preference provisions under the Bankruptcy Code are intended to ensure that all creditors receive an equitable pro rata share of the debtor's assets, it...
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