Art Van Furniture, LLC - Preference Defense Lawyer

On February 22, 2022, Plaintiff Alfred T. Giuliano in his capacity as chapter 7 trustee of Art Van Furniture, LLC, et al. began filing complaints in adversary proceedings, pursuant to sections 547 and 550 of the Bankruptcy Code, seeking to avoid and recover certain transfers made to the individual defendant(s) within 90 days prior to the commencement of the Debtors' Bankruptcy cases.  Approximately 60 such complaints have been filed so far.

The Debtors in these Chapter 7 cases are: Art Van Furniture, LLC; AVF Holding Company, Inc.; AVCE, LLC; AVF Holdings I, LLC; AVF Holdings II, LLC; AVF Parent, LLC; Levin Parent, LLC; Art Van Furniture of. Canada, LLC; AV Pure Sleep Franchising, LLC; AVF Franchising, LLC; LF Trucking, Inc.; Sam Levin, Inc.; and Comfort Mattress LLC.

The Plaintiff seeks to avoid and recover from Defendants all preferential transfers of property that occurred during the ninety (90) day period prior to the commencement of the bankruptcy proceedings of the Debtors.

The bankruptcy case and these adversary actions are before the Honorable Christopher S. Sontchi.



Background, as alleged by Plaintiff:

Prior to the Conversion Date, the Debtors offered customers a wide array of home furnishings under several well-known brands, including Art Van Furniture, Pure Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress, and Wolf Furniture.


Procedural History:

On March 8, 2020, each of the Debtors filed a voluntary petition under chapter 11 of the Bankruptcy Code. The Debtors’ cases are jointly administered for
administrative purposes only.

On April 6, 2020, the Court entered an order converting the Debtors’ cases to cases under chapter 7 of the Bankruptcy Code. On April 7, 2020, Alfred T. Giuliano was appointed as the chapter 7 trustee of the Debtors.


Common Defenses in Preference Actions

The United States Bankruptcy Code provides many affirmative defenses to preference actions, contained within Section 547(c). For example, the most common defenses that may be available to a Defendant under Section 547(c) may include:

    •    the transfer was a contemporaneous exchange for new value given to the debtor (i.e., the debtor received something of value in exchange for the transfer); 11 U.S.C. §547(c)(1);

    •    after such transfer, Defendant gave new value to or for the benefit of the debtor (i.e., the Defendant extended additional credit to the Debtor after receiving the transfer) 11 U.S.C. §547(c)(4); or

    •    the transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the recipient (i.e., Defendant made the transfer under ordinary business terms). 11 U.S.C. §547(c)(2).


For more information, see our pages on Preference Defense Litigation: http://www.tobialaw.com/delaware-preference-defense-lawyer.html and Fraudulent Transfer Defense Litigation: https://www.tobialaw.com/defense-of-fraudulent-transfer-actions.html

If you conducted business with Art Van Furniture, LLC or any of the affiliated debtors, and especially if a complaint has been filed against you or your business, even if not served yet, email us at info@tobialaw.com or call the firm’s Wilmington offices directly at (302) 655-5303 to schedule a free initial consultation. We can discuss the situation and share with you our initial observations at no charge.
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