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Our bankruptcy practice is devoted primarily to representing defendants of preference and fraudulent conveyance actions under Sections 547 and 548 of the Bankruptcy Code. Read More…

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We have deep knowledge of preference and fraudulent conveyance defense litigation. This means reviewing and analyzing hundreds of preference and fraudulent conveyance judicial opinions issued each and every year. Read more…

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Home / * Firm News / Dismissed For No Payment

Dismissed For No Payment

November 12, 2018, Northern District of Texas – The Debtors collectively operated a nursery under the name Zelenka Farms. Zelenka was one of the nation’s largest wholesale growers and distributors of container-grown shrubs, trees, perennials, roses, and groundcovers. The Defendant, our client, is a company engaged in the business of transportation of nursery stocks to or for the Debtor.

The plaintiff sought to recover payments, worth $39,000 from our client, made during the 90 days before the petition date as preference transfers. 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 were made according to the terms of the contract between the parties. Further, 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 agreed to dismiss the case for no payment