Fleetwood Acquisition Corp. - Preference and Fraudulent Transfer Defense Lawyer

On November 2, 2021, Plaintiff Don A. Beskrone, as Chapter 7 Trustee for Fleetwood Acquisition Corp., et al., began filing complaints in adversary proceedings, pursuant to sections 547, 548 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, and to disallow any claims held by the individual defendants.   To date, approximately 34 such complaints have been filed.

The Debtors in these chapter 7 cases are Fleetwood Acquisition Corp., Fleetwood Industries, Inc. d/b/a Fleetwood Fixtures, and High Country Millwork, Inc.

Procedural History:

On November 4, 2019, each of the Debtors filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. On November 5, 2019, the Court entered an Order directing the joint administration of the Debtors’ cases.

On June 15, 2020, the Debtors filed a Motion of the Debtors for an Order Converting These Cases from Chapter 11 to Chapter 7 of the Bankruptcy Code. The Court entered an Order converting these Cases on June 23, 2020.

These adversary actions are before the Honorable Karen B. Owens.

Background, as alleged by Plaintiff:

    "Prior to the Petition Date, the Debtors were providers of customized fixtures and displays that served a wide variety of customers in the retail and hospitality industries. The Debtors provided everything from initial design services through the manufacture and installation of fixtures for customers. In their businesses, the Debtors worked with numerous vendors to provide their goods and services."

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 page on Preference Defense Litigation: http://www.tobialaw.com/delaware-preference-defense-lawyer.html

If you conducted business with any of the Fleetwood Acquisition Corp. Debtors and especially if you have received a complaint or a demand letter, or 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 an initial consultation. We can discuss the situation and share with you our initial observations at no charge.
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