Preferential transactions in insolvency are avoidable when transfers place creditors or related parties ahead of the statutory distribution scheme. Preferential transactions are avoidable where the corporate debtor, at the relevant time, transfers property or an interest in property to benefit a creditor, surety, or guarantor for antecedent debt or liability, and thereby places that person in a better position than distribution under insolvency waterfall rules. Exclusions apply for transfers in the ordinary course of business and certain security interests supporting new value. Relevant time is two years for related parties and one year for others.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Preferential transactions in insolvency are avoidable when transfers place creditors or related parties ahead of the statutory distribution scheme.
Preferential transactions are avoidable where the corporate debtor, at the relevant time, transfers property or an interest in property to benefit a creditor, surety, or guarantor for antecedent debt or liability, and thereby places that person in a better position than distribution under insolvency waterfall rules. Exclusions apply for transfers in the ordinary course of business and certain security interests supporting new value. Relevant time is two years for related parties and one year for others.
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