January 25, 2019, Northern District of Illinois – The Debtor CGI, Inc. was the largest retail food cooperative and distributor in Chicago. It served member retailers that operated local supermarkets and large grocery chains. The Defendant, our client is one of the largest independent petroleum distributors in the Midwest, offering a combination of quality products and outstanding service. It provides a complete product line of gasoline, diesel fuels, lubricants, and specialty products, all of which are major brand products direct from the manufacturer.
The plaintiff sought to recover payments, worth $348, 927.59 from our client, made during the 90 days before the petition date as preferential and fraudulent conveyances. We successfully established in our position statement that the services supplied by the defendant to the debtor remained unchanged from the historical or base period through the preference period. Based on our detailed analysis, we showed that the alleged transfers fell within the historical or base period payment range, which went to prove that the preference transfers were consistent with the debtors’ past payment practices and deemed normal and ordinary with no change occurring in comparison to the pre-preference and preference periods. The ordinariness of the parties’ transactions stood out as proof that the ordinary course of business exception applied to the parties. Therefore, the alleged transfers were protected from the plaintiff’s avoidance power under Section 547(c)(2)(A) of the Bankruptcy Code.
We also argued that the debtor received reasonably equivalent value in exchange for the transfers provided. In our position statement, we showed that our client received the transfers as payment for goods provided to the debtor and that the delivery of goods was reasonably equivalent value for payment thereof. Thus, the transfers were supported by reasonably equivalent value may not be avoided.
Based on our position statement, the plaintiff agreed to dismiss the case for no payment.