Nothing is more frustrating to a trade creditor saddled with a large unpaid balance owed by a debtor in bankruptcy than being subject to the risk of having to remit back to the debtor’s estate “preference” payments received from the debtor prior to the commencement of the bankruptcy case. Pursuant to section 547(b) of the Bankruptcy Code, a debtor in possession or trustee can seek the recovery of alleged preference payments made within 90 days of the bankruptcy filing date....

Originally published in Business Credit - April 2020.