Secured Transactions Assignment 31

1
Secured TransactionsAssignment 31

• Trustees vs. Secureds Preferences

2
The Big Picture

• Part Two The Creditor Third Party Relationship
• Chapter 9 Competitions for Collateral
• Assignment 28 Lien Creditors vs Secureds
  The Basics
• Assignment 29 Lien Creditors vs Secureds
  Future Advance
• Assignment 31 Trustees vs Secureds
  Preferences
• Assignment 32 Secureds vs. Secureds Basics
• Assignment 33 Secureds vs. Secureds Real
  Estate
• Assignment 34 Secureds vs. Secureds Multiple
  collateral
• Assignment 35 Sellers vs. Secureds
• Assignment 36 Buyers vs. Secureds

3
The policies
Petition
State the race of diligence
Bankruptcy equality is equity

4
The policies
Petition
State the race of diligence
Bankruptcy equality is equity
90 days

5
The policies
Petition
State the race of diligence
Bankruptcy equality is equity
90 days

6
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property

7
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor

8
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .

9
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)

10
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .

11
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .
• (B) between 90 days and one year before the date
  of the filing . . . if such creditor . . . was an
  insider, 101(31)

12
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .
• (B) between 90 days and one year before the date
  of the filing . . . if such creditor . . . was an
  insider, 101(31)
• (5) That enables such creditor to receive more
  than such creditor would receive if the case were
  . . . under chapter 7 . . . and the transfer
  had not been made . . .

13
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .
• (B) between 90 days and one year before the date
  of the filing . . . if such creditor . . . was an
  insider, 101(31)
• (5) That enables such creditor to receive more
  than such creditor would receive if the case were
  . . . under chapter 7 . . . and the transfer
  had not been made . . .

14
When is a transfer made?

• 547(e) (2). A transfer is made
• (A) At the time such transfer takes effect
  between the transferor and the transferee, if
  such transfer is perfected at, or within 30 days
  after such time . . .
• (B) At the time such transfer is perfected, if
  such transfer is perfected after such 30 days . .
  .
• (1). For purposes of this section --
• (A) A transfer of real property . . . is
  perfected when a bona fide purchaser . . . cannot
  acquire an interest that is superior . .
• (B) A transfer of a fixture or property other
  than real property is perfected when a creditor .
  . . cannot acquire a judicial lien that is
  superior . . .

15
Problem 31.1, page 510
Convert to Ch 7
Ch 11
Now
Sep 1
Dec 30

We represent the trustee in bankruptcy in a case
filed under Chapter 11 on September 1 and
converted to Chapter 7 on December 30.
16
Problem 31.1, page 510
Convert to Ch 7
Ch 11
Now
Sep 1
Dec 30

We represent the trustee in bankruptcy in a case
filed under Chapter 11 on September 1 and
converted to Chapter 7 on December 30. We are
deciding whether to attack transactions as
preferences
17
Problem 31.1, page 510
Convert to Ch 7
Ch 11
Now
Sep 1
Dec 30

We represent the trustee in bankruptcy in a case
filed under Chapter 11 on September 1 and
converted to Chapter 7 on December 30. We are
deciding whether to attack transactions as
preferences From what date does the preference
period run?
18
Problem 31.1, page 510
Convert to Ch 7
Ch 11
Jun 3
Now
Sep 1
Dec 30

19
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
Sep 1
Dec 30
Aug15

• Wooden borrows 300K secured from 1st Bank Aug
  15.

20
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
FS filed
Ch 11
Now
Sep 1
Dec 30
Aug15
Aug16

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day.

21
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
FS filed
Ch 11
Now
Sep 1
Dec 30
Aug15
Aug16

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?

22
The Statute

• 547(b). The trustee may avoid any transfer of
  an interest of the debtor in property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .
• (B) between 90 days and one year before the date
  of the filing . . . if such creditor . . . was an
  insider, 101(31)
• (5) That enables such creditor to receive more
  than such creditor would receive if the case were
  . . . under chapter 7 . . . and the transfer
  had not been made . . .

23
The Statute

• 547(b). The trustee may avoid any transfer of
  an interest of the debtor in property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .
• (B) between 90 days and one year before the date
  of the filing . . . if such creditor . . . was an
  insider, 101(31)
• (5) That enables such creditor to receive more
  than such creditor would receive if the case were
  . . . under chapter 7 . . . and the transfer
  had not been made . . .

24
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
FS filed
Ch 11
Now
Sep 1
Dec 30
Aug15
Aug16

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).

25
Problem 31.1, page 510
Convert to Ch 7
Unsecured loan
Ch 11
Now
Sep 1
Dec 30
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7.

26
Problem 31.1, page 510
Convert to Ch 7
Unsecured loan
SA FS filed
Ch 11
Now
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed.

27
Problem 31.1, page 510
Convert to Ch 7
Unsecured loan
SA FS filed
Ch 11
Now
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable?

28
Problem 31.1, page 510
Convert to Ch 7
Unsecured loan
SA FS filed
Ch 11
Now
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable? When was transfer?

29
Problem 31.1, page 510
Convert to Ch 7
Unsecured loan
SA FS filed
Ch 11
Now
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable? When was transfer? Yes.
  547(e)(2)(A).

30
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
Sep 1
Dec 30
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable? When was transfer? Yes.
  547(e)(2)(A).
• Wooden borrows 300K secured from 3rd Bank Feb 7.
  

31
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable? When was transfer? Yes.
  547(e)(2)(A).
• Wooden borrows 300K secured from 3rd Bank Feb 7.
  FS lost in mail, filed July 11.

32
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable? When was transfer? Yes.
  547(e)(2)(A).
• Wooden borrows 300K secured from 3rd Bank Feb 7.
  FS lost in mail, filed July 11. Avoidable?

33
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Jul 11
Feb 7

• Wooden borrows 300K secured from 1st Bank Aug
  15. 1st Bank files the next day. Avoidable?
  No, 547(e)(2).
• Wooden borrows 300K from 2nd Bank unsecured Feb
  7. On July 11 Wooden granted a SI and Secondbank
  filed. Avoidable? When was transfer? Yes.
  547(e)(2)(A).
• Wooden borrows 300K secured from 3rd Bank Feb 7.
  FS lost in mail, filed July 11. Avoidable?
  Yes. 547(e)(1)(B). (But see 9-516(a)!)

34
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
Sep 1
Dec 30
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21.

35
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Aug 4
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21. 4th Bank files August 4.

36
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Aug 4
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21. 4th Bank files August 4.
  Avoidable?

37
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Aug 4
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21. 4th Bank files August 4.
  Avoidable? No. 547(c)(3).

38
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Aug 4
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21. 4th Bank files August 4.
  Avoidable? No. 547(c)(3).
• Different if 4th Bank disbursed to Wooden and
  Wooden used other funds to purchase?

39
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Aug 4
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21. 4th Bank files August 4.
  Avoidable? No. 547(c)(3).
• Different if 4th Bank disbursed to Wooden and
  Wooden used other funds to purchase? Not PMSI.
  547(c)(3)(A)(iv) in fact used by the debtor to
  acquire such property.

40
Problem 31.1, page 510
SA FS loan
Convert to Ch 7
Ch 11
Now
FS filed
Sep 1
Dec 30
Aug 4
Jul 21

• Wooden borrows 30K purchase money secured from
  4th Bank July 21. 4th Bank files August 4.
  Avoidable? No. 547(c)(3).
• Different if 4th Bank disbursed to Wooden and
  Wooden used other funds to purchase? Not PMSI.
  547(c)(3)(A)(iv) in fact used by the debtor to
  acquire such property. Still no different.
  547(e)(2)(A).

41
Problem 31.1, page 510
Convert to Ch 7
Ch 11
Now
Loan
Sep 1
Dec 30
Mar 9
f. Elsa lends March 9.

42
Problem 31.1, page 510
Convert to Ch 7
SA FS filed
Ch 11
Now
Loan
Sep 1
Dec 30
Apr 12
Mar 9
f. Elsa lends March 9. SA signed and FS filed
April 12.

43
Problem 31.1, page 510
Convert to Ch 7
SA FS filed
Ch 11
Now
Loan
Sep 1
Dec 30
Apr 12
Mar 9
f. Elsa lends March 9. SA signed and FS filed
April 12. Avoidable?

44
Problem 31.1, page 510
Convert to Ch 7
SA FS filed
Ch 11
Now
Loan
Sep 1
Dec 30
Apr 12
Mar 9

• Elsa lends March 9. SA signed and FS filed April
  12. Avoidable? Yes. 101(31)(B)(vi) and (45).

45
Problem 31.1, page 510
Convert to Ch 7
SA FS filed
Ch 11
Now
Loan
Sep 1
Dec 30
Apr 12
Mar 9

• Elsa lends March 9. SA signed and FS filed April
  12. Avoidable? Yes. 101(31)(B)(vi) and (45).
• When was the transfer made?

46
Problem 31.1, page 510
Convert to Ch 7
SA FS filed
Ch 11
Now
Loan
Sep 1
Dec 30
Apr 12
Mar 9

• Elsa lends March 9. SA signed and FS filed April
  12. Avoidable? Yes. 101(31)(B)(vi) and (45).
• When was the transfer made? April 12.
  547(e)(2)(B).

47
Problem 31.2, page 511
1,547K verdict
Dysan
Creditors
48
Problem 31.2, page 511
1,547K verdict
Dysan
Creditors
FS
FS
FS
49
Problem 31.2, page 511
1,547K verdict
Judgment
Dysan
Creditors
FS
FS
FS
50
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
51
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do?
52
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy?
53
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy? File an involuntary bankruptcy?
54
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy? File an involuntary bankruptcy?
Accept a security interest?
55
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy? File an involuntary bankruptcy?
Accept a security interest? Deal Preferred
creditors assign us our prorata share of their
claims.
56
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy? File an involuntary bankruptcy?
Accept a security interest? Deal Preferred
creditors assign us our prorata share of their
claims. Example Assets are 1 million. Debt
is 4 million. FS debt is 2 million.
57
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy? File an involuntary bankruptcy?
Accept a security interest? Deal Preferred
creditors assign us our prorata share of their
claims. Example Assets are 1 million. Debt
is 4 million. FS debt is 2 million. Deal We
get this fraction of the assets 1,547/3,547
58
Problem 31.2, page 511
1,547K verdict
Judgment
Now
Dysan
90 days
Creditors
FS
FS
FS
The debtor is still in business. What should we
do? Levy? File an involuntary bankruptcy?
Accept a security interest? Deal Preferred
creditors assign us our prorata share of their
claims. Example Assets are 1 million. Debt
is 4 million. FS debt is 2 million. Deal We
get this fraction of the assets
1,547/3,547 If others figure it out, we cut
them in.
59
The Statute

• 547(b). The trustee may avoid any transfer
  (101(54)) of an interest of the debtor in
  property
• To or for the benefit of a creditor
• For or on account of an antecedent debt . . .
• Made while the debtor is insolvent, 101(32)
• Made --
• (A) on or within 90 days before the date of the
  filing . . .
• (B) between 90 days and one year before the date
  of the filing . . . if such creditor . . . was an
  insider, 101(31)
• (5) That enables such creditor to receive more
  than such creditor would receive if the case were
  . . . under chapter 7 . . . and the transfer
  had not been made . . .

60
Problem 31.3, page 511
2.5M
1.3M
1.2M

90 days before
61
Problem 31.3, page 511
2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
62
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?

2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
63
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?

2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy

• The trustee may avoid any transfer
• To a creditor on account of an antecedent debt
• Made while debtor was insolvent
• Made within 90 days before the petition
• That enables the creditor to receive more than it
  would if debtor didnt make the transfer but
  filed chapter 7.

64
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?

2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy

• The trustee may avoid any transfer. What is the
  transfer?
• To a creditor on account of an antecedent debt
• Made while debtor was insolvent
• Made within 90 days before the petition
• That enables the creditor to receive more than it
  would if debtor didnt make the transfer but
  filed chapter 7.

65
Problem 31.3, page 511
Did Swissbank receive an avoidable
preference? Payments and security interests in
inventory items 547(e)(3)

2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy

• The trustee may avoid any transfer
• To a creditor on account of an antecedent debt
• Made while debtor was insolvent
• Made within 90 days before the petition
• That enables the creditor to receive more than it
  would if debtor didnt make the transfer but
  filed chapter 7.

66
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?
2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
547(c)(5). The trustee may not avoid . . . a
transfer . . . that creates a perfected security
interest in inventory or a receivable . . .
except to the extent that the aggregate of all
such transfers . . . caused a reduction, as of
the date of filing . . . of any amount by which
the debt secured . . . exceeded the value of all
security interests . . . 90 days before the
filing of the petition.
67
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?
2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
547(c)(5). The trustee may not avoid . . . a
transfer . . . that creates a perfected security
interest in inventory or a receivable . . .
except to the extent that the aggregate of all
such transfers . . . caused a reduction, as of
the date of filing . . . of any amount by which
the debt secured . . . exceeded the value of all
security interests . . . 90 days before the
filing of the petition.
68
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?
2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
547(c)(5). The trustee may not avoid . . . a
transfer . . . that creates a perfected security
interest in inventory or a receivable . . .
except to the extent that the aggregate of all
such transfers . . . caused a reduction, as of
the date of filing . . . of any amount by which
the debt secured . . . exceeded the value of all
security interests . . . 90 days before the
filing of the petition.
69
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?
2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
547(c)(5). The trustee may not avoid . . . a
transfer . . . that creates a perfected security
interest in inventory or a receivable . . .
except to the extent that the aggregate of all
such transfers . . . caused a reduction, as of
the date of filing . . . of any amount by which
the debt secured . . . exceeded the value of all
security interests . . . 90 days before the
filing of the petition.
70
Problem 31.3, page 511
Did Swissbank receive an avoidable preference?
2.5M
1.3M
1.2M
1.5M
800K
700K

90 days before
Bankruptcy
547(c)(5). The trustee may not avoid . . . a
transfer . . . that creates a perfected security
interest in inventory or a receivable . . .
except to the extent that the aggregate of all
such transfers . . . caused a reduction, as of
the date of filing . . . of any amount by which
the debt secured . . . exceeded the value of all
security interests . . . 90 days before the
filing of the petition. 500K
71
Problem 31.4, page 512

• Our law firm settles a class action for 247
  million to the class and 33 million to our firm.
• The defendant pays by check.
• We deposit the check.
• The check clears.
• Is it time to celebrate?

72
Problem 31.4, page 512

• Our law firm settles a class action for 247
  million to the class and 33 million to our firm.
• The defendant pays by check.
• We deposit the check.
• The check clears.
• Is it time to celebrate? No.

73
Problem 31.4, page 512

• Our law firm settles a class action for 247
  million to the class and 33 million to our firm.
• The defendant pays by check.
• We deposit the check.
• The check clears.
• Is it time to celebrate? No.
• When will it be time to celebrate?

74
Problem 31.4, page 512

• Our law firm settles a class action for 247
  million to the class and 33 million to our firm.
• The defendant pays by check.
• We deposit the check.
• The check clears.
• Is it time to celebrate? No.
• When will it be time to celebrate? 90 days after
  the check clears.

75
Problem 31.5, page 512

• Modern Chapter 11 preference avoidance
• a. Preferences recovered go to unsecured
  creditors

76
Problem 31.5, page 512

• Modern Chapter 11 preference avoidance
• a. Preferences recovered go to unsecured
  creditors
• b. So get plan first, then recover preferences

77
Problem 31.5, page 512

• Modern Chapter 11 preference avoidance
• a. Preferences recovered go to unsecured
  creditors
• b. So get plan first, then recover preferences
• c. Thousands of preference actions in a single
  case

78
Problem 31.5, page 512

• Modern Chapter 11 preference avoidance
• a. Preferences recovered go to unsecured
  creditors
• b. So get plan first, then recover preferences
• c. Thousands of preference actions in a single
  case
• Jim Bowers story

79
Problem 31.5, page 512

• Modern Chapter 11 preference avoidance
• a. Preferences recovered go to unsecured
  creditors
• b. So get plan first, then recover preferences
• c. Thousands of preference actions in a single
  case
• Jim Bowers story
• Should preference avoidance be abolished?

80
Problem 31.5, page 512

• Modern Chapter 11 preference avoidance
• a. Preferences recovered go to unsecured
  creditors
• b. So get plan first, then recover preferences
• c. Thousands of preference actions in a single
  case
• Jim Bowers story
• Should preference avoidance be abolished?
• Congress responded in 2005 with a 5,575 minimum.
  547(c)(9)