Bankruptcy Litigation, including Preference and Fraudulent Transfer

Why Choose the Law Offices of Kevin S. Neiman, pc

In representing trustees and other fiduciaries, our law office, located in Denver, Colorado, has substantial experience investigating, commencing, and prosecuting these types of claims. Further, we defend defendants in this litigation and even represent litigation targets after they receive a demand letter from estate fiduciaries, often threatening a lawsuit if payment on the alleged claim amount is not received within a certain number of days.

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Bankruptcy litigation often involves complex financial transactions where cases must be prepared relatively quickly. Litigation typically arises through contested matters and adversary proceedings, which are related proceedings in bankruptcy court to further the administration of bankruptcy estates.

Contested Matters and Adversary Proceedings

Most relief sought in a bankruptcy case comes by way of motion or objections, such as:

  • confirmation of plans of reorganization
  • motions for relief from stay
  • motions to approve a settlement or compromise
  • motions to avoid judicial liens
  • motions to convert or dismiss a bankruptcy case
  • motions to value collateral or property
  • objections to a debtor’s claim of exemptions
  • objections to claims
  • motions to assume or reject executory contracts and unexpired leases
  • motions to approve sales of real or personal property free and clear of liens and encumbrances

If the sought relief draws a timely objection or response that opposes the relief, a contested matter arises.

Another way that relief can be pursued is via adversary proceedings, which are lawsuits commenced in bankruptcy court that largely incorporate certain Federal Rules of Civil Procedure. They are generally used to recover property in order to redistribute money to creditors in accordance with the priority of payment scheme under the Bankruptcy Code, but also may provide for other relief. Some of these adversary proceedings include:

  • avoidance and recovery of fraudulent conveyances
  • avoidance and recovery of post-petition transfers
  • avoidance and recovery of preferential transfers
  • objection to a debtor’s discharge
  • turnover of property of the bankruptcy estate
  • partition of real property
  • sought declaratory judgments or injunctive relief
  • determination as to the dischargeability of a particular debt
  • avoidance and preservation of a security interest in property of the estate

Preference Claims and Fraudulent Transfer Actions

There are several types of claims available to trustees and other bankruptcy estate fiduciaries that are filed to attempt to bring money into bankruptcy estates for ultimate distribution to creditors. Frequent ones are preference claims pursuant § 547 of the Bankruptcy Code and fraudulent transfer claims pursuant to §544 and § 548 of the Bankruptcy Code. In addition, trustees and other fiduciaries have the power to bring certain state law claims.

  • Preference claims are generally those used to avoid a debtor’s pre-bankruptcy transfer of property to a creditor within a fixed period that may prefer that creditor over the debtor’s other creditors.
  • Fraudulent transfer claims are typically used to avoid transfers made by the debtor within a certain period of time that are alleged to have been made with actual or constructive fraud.

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