March 2, 2020, Southern District of New York – The Debtor is a company engaged in the business of distributing restaurant equipment, foodservice supplies, and janitorial supplies in the United States. It provided beverage service products, cookware, dining and buffet products, food preparation products, food storage, and ware handling products, large and small equipment, safety products, soft goods, storage, and transport products, and inventory clearance products.
The Defendant, our client, is a family-owned company, which offers a large selection of sizes and gauges can liners, poly bags, and produce bags. It began manufacturing can liners and gradually expanded to manufacturing poly bags and produce bags. During the course of their business, the Debtor and the Defendant entered into transactions where the latter sold trash bags and can liners to the Debtor.
The plaintiff sought to recover payments, worth $185,301.63 from our client, made during the 90 days before the Debtor’s petition date as preferential transfers. Upon review, we found that all the payments were made within the preferential period. In our position statement, we showed that the transactions were made in ordinary course of business between the parties. Based on our analysis, we showed that the average period for payment of the Defendant’s invoices was identical during the base period and the preference period. During the base period, the Defendant’s invoices were paid on an average of 53.08 days. However, during the preference period, the Defendant’s invoices were paid on an average of 61.65 days. By citing relevant precedents, we established that the difference of 8 days between the base period and the preference period was negligible. Further, the timing of payments remained constant during the parties’ business relation.
Based on our defenses, the plaintiff agreed to dismiss the case for no payment.