The New Value Defense
In this episode of Lowenstein’s Bankruptcy Lowdown, Eric Chafetz and Phillip Khezri of the firm’s Bankruptcy & Restructuring Department discuss a recent Eleventh Circuit Court of Appeals decision that the post-petition...more
The U.S. Court of Appeals for the Eleventh Circuit reversed a bankruptcy court’s decision which held that a “subsequent new value” defense to avoidable preference liability must be reduced by payments the creditor-defendant...more
Preference defense received an important boost this week when the Eleventh Circuit decided that invoices paid under 11 U.S.C. § 503(b)(9) can count as "new value" in defending against preference claims. It is the first...more
Nothing is more frustrating to a trade creditor holding a large unpaid balance owed by a debtor in bankruptcy than the risk that payments the trade creditor received before the debtor filed bankruptcy may be clawed back by...more
In a coordinated effort, on November 27, 2020, the Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) published final rules to modernize regulations implementing the federal...more
In Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), 899 F.3d 1178 (11th Cir. 2018), the U.S. Court of Appeals for the Eleventh Circuit broadened the scope of section 547(c)(4) of the Bankruptcy Code’s...more
The Eleventh Circuit, in In re BFW Liquidation, LLC., Case No. 17-13588, 2018 WL 3850101 (11th Cir. Aug. 14, 2018), reversed the Bankruptcy Court’s decision on direct appeal, holding that the new value defense to preferences...more
• In its recent decision in William S. Kaye, Trustee of the BFW Liquidating Trust v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), the U.S. Court of Appeals for the Eleventh Circuit held that liability for a...more
Trying to explain the primary purpose of Section 547 of the Bankruptcy Code to a client that just received a demand letter or complaint to avoid and recover preferential transfers can be a tough sell. Although the Section’s...more
In an opinion that is informative although not precedential, In re AE Liquidation, Inc., No. 17-1794 (May 4, 2018), the Court of Appeals for the Third Circuit considered both the ordinary course and the new value defenses to...more
Preference actions are, for the most part, insanity. We won’t go on a tirade here. But recently, a ruling brings common sense to the “new value” defense....more
Unless creditors accept a debtor's plan of reorganization, bankruptcy law requires the plan to provide for the payment in full of creditors before owners of the debtor receive anything on account of their equity interest....more