April 12, 2018, Delaware – The Debtors, SP Images, Inc. was a full service licensed distributor of sports and entertainment products. It specialized in providing retail partners with an assortment of licensed merchandise, including individual items licensed by Major League Baseball, the National Football League, the National Hockey League, the National Basketball Association, Marvel Comics, DC Comics and more. Our client, the Defendant, was a toy manufacturer and a seller of collectible action figures.
The plaintiff sought to recover payments, worth $16,932.52 from our client, made during the 90 days before the petition date as preference transfers. We successfully established in our position statement that the goods or products 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 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.
Based on our position statement, the plaintiff dismissed the case for no payment.