American Apparel Preference Actions Filed in Delaware Bankruptcy Court

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Earlier this month, APP Winddown, LLC (formerly known as American Apparel, LLC) and its chapter 11 affiliates (the “Debtors”) filed approximately 201 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548, 549 and 550 of the Bankruptcy Code.

The Debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on October 5, 2015 under Chapter 11 of the Bankruptcy Code.  On January 27, 2016, the Court entered an order confirming the First Amended Joint Plan of Reorganization of the Debtors and Debtors in Possession.

The various avoidance actions are pending before the Honorable Brendan Shannon.  For preference defendants looking for an analysis of defenses that can be asserted in response to a preference complaint, below are several articles on this topic:

Preference Payments: Brief Analysis of Preference Actions and Common Defenses

Minimizing Preference Exposure: Require Prepayment for Goods or Services

Minimizing Preference Exposure (Part II) – Contemporaneous Exchanges

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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