CalPlant I, LLC - Preference and Fraudulent Transfer Defense Lawyer
LLC and CalPlant I, LLC.
The bankruptcy case and these adversary actions are before Judge John T. Dorsey.
"the Debtors constructed the world’s first plant capable of manufacturing MDF from rice straw. Located in Willows, California, approximately 85 miles north of Sacramento, the Debtors’ plant (the “Plant”) was intended to convert rice straw—a waste product of rice farming — into high-quality, environmentally friendly, and competitively priced MDF. The Debtors’ goal in developing the Plant and its underlying manufacturing processes was born in environmental conservation. The Plant was intended to contribute to the elimination of more traditional methods of rice straw disposal, which historically involved the incineration of leftover rice straw and currently necessitates the reincorporation of straw into the soil, followed by flooding the field with water and chemicals to hasten decomposition. The Debtors’ method, if successful, would not only reduce methane emissions and water consumption, but also offer rice farmers a less expensive, less labor-intensive, less water-intensive, and more sustainable means to dispose of waste. Further, using rice straw as feedstock (rather than wood fiber, which is the typical feedstock) would reduce the need to cut down trees that filter CO2 from the atmosphere."
Subsequently, the Debtors remained in possession of their assets and continued to operate and manage their businesses as debtors-in-possession to implement the wind down of the Debtors’ operations and the liquidation of the Debtors’ assets.
On June 2, 2023, the Debtors filed their Combined Disclosure Statement and Joint Chapter 11 Plan.
On August 15, 2023, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order (I) Approving Disclosure Statement on a Final Basis and (II) Confirming the Third Amended Combined Disclosure Statement and Joint Chapter 11 Plan Proposed by CalPlant I Holdco, LLC and CalPlant I, LLC Pursuant to Chapter 11 of the Bankruptcy Code (the “Confirmation Order”).
Pursuant to the Confirmation Order, on the Effective Date, the Debtors transfered all of their rights, title, and interest in and to the Debtors’ Assets to the Liquidating Trust, including causes of action under chapter 5 of the Bankruptcy Code not previously sold or transferred, or not otherwise compromised or settled pursuant to the Plan or a Final Order of the Bankruptcy Court.
The Confirmation Order further provides that the Liquidating Trust shall be governed by the Liquidating Trust Agreement and administered by the Liquidating Director.
Lance Miller was appointed as the Liquidating Director for the Liquidating Trust.
On September 29, 2023, the Effective Date of the Plan occurred, and the Plan was consummated.
On October 2, 2023, the Court entered the Final Decree Closing the Chapter 11 Case of CalPlant I Holdco, LLC.
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 page on Preference Defense Litigation: http://www.tobialaw.com/delaware-preference-defense-lawyer.html
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