Parkins & Rubio, LLP is a bankruptcy boutique law firm with offices in Houston and New York City. We are highly experienced in defending preference and fraudulent conveyance actions under Sections 547 and 548 of the Bankruptcy Code. Our team is efficient, responsive, and trial-tested, ensuring clients receive the strongest defense available against avoidance litigation.
Contact Armando Mendoza at 713-715-1663 or AMendoza@ParkinsRubio.com for more information.
About Preference & Fraudulent Conveyance Actions
Sections 547 and 548 of the Bankruptcy Code exist to ensure fairness so that all creditors share the debtor’s remaining assets equally, rather than letting a few get an unfair head start. To understand preference and fraudulence conveyance actions under sections 547 and 548 of the Bankruptcy Code, we need to start by reviewing what happens when somebody or an entity files for bankruptcy.
What Happens When Someone Files for Bankruptcy
When a person or business files for bankruptcy, a “bankruptcy estate” is created, which is essentially a legal bucket that holds all their assets. The goal is to divide those assets fairly among creditors whether they are people or companies. But before the bankruptcy filing, the debtor might have made certain payments or transfers that an be viewed as unfairly favoring one creditor over others or an attempt to hide property from creditors. The law allows a bankruptcy trustee to undo or recover those transfers so everyone is treated more equally.
Preference Actions Under Section 547
A preference is when the debtor pays or transfers something to one creditor shortly before bankruptcy, potentially giving that creditor more than they would have received through the bankruptcy process. Under Section 547, the trustee can demand the return of a payment to the bankruptcy estate and be redistributed among all creditors if it was made to a creditor for an old debt while the debtor was insolvent within 90 days to a year before the bankruptcy filing.
Fraudulent Conveyance Under Section 548
A fraudulent conveyance is when a debtor is alleged to have transferred property to cheat creditors or for less than fair value when insolvent. Whether intended to keep an asset out of reach or constructed to sell an asset for too little to a confidant, a trustee can undo these transfers, recover the asset or its value, and use it to pay creditors.
Parkins & Rubio is Your Defense Against
Preference & Fraudulent Conveyance Actions
Parkins & Rubio defends Section 547 preference actions to protect clients from having to return legitimate payments, negotiate to reduce liability, avoid double loss, and guide clients through the technical bankruptcy process.
We also defend Section 548 fraudulent conveyance actions to challenge a trustee’s claim that the transfer was improper, assert good faith or fair value statutory defenses, minimize financial loss, and protect legitimate payments.
Contact Armando Mendoza at 713-715-1663 or AMendoza@ParkinsRubio.com for more information.
The content of this blog post is for informational purposes only and does not constitute legal advice. It provides a summary, and the referenced materials should be reviewed for full details. The information may not reflect current legal developments. The date of the publication of the post is applied at the discretion of the editor and no reliance should be made on the date of publication. Please reach out to Parkins & Rubio LLP or your attorney for guidance.
Topics Discussed: Bankruptcy Code, Sections 547, Sections 547 Bankruptcy, Sections 548, Sections 548 Bankruptcy