Tuesday, May 12, 2009

Detailed Eleventh Circuit on Preferential Transfers

In Carrier Corp. v. Buckley (08-11098) Judge Cudahy wrote a detailed published opinion. (Judge Richard D. Cudahy is a Seventh Circuit Judge sitting on the Eleventh Circuit by designation.) The opinion goes into detail about "ordinary course of business," "preferential transfers" and other bankruptcy theories.

The opinion explains the issues in great detail but concludes the trustee was entitled to recover the preferential transfer and:

1.) The payments were not in the ordinary course of business (and an explanation of this issue); and

2.) A trustee is not entitled to recover prejudgment interest when it recovers preferential transfers. However, an award of prejudgment interest is appropriate in the bankruptcy court's discretion.


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