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- Topics:
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- ABC-Amega,
- Bankruptcy,
- Business Operations,
- Creditor,
- Debtor,
- Litigation,
- Preference
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Overview: A preference or preferential transfer under Section 547(b) of the federal bankruptcy code is: A payment (or transfer of an interest in property) received by a creditor within a defined period prior to the payor (debtor) filing bankruptcy. The purpose of the law is to discourage disparate treatment of creditors in a bankruptcy situation. The theory behind the law is that, as an insolvent debtor slides into bankruptcy, there will be preferential treatment of some creditors, perhaps those that are aggressive or those that are on especially friendly terms with the debtor. There are basically three types of preferences: Insider preferences, Fraudulent transfers, Non-insider preferences. Most preference claims are of non-insider type, against "non-insider" payments or transfers, generally to unsecured creditors. Therefore, it is the non-insider preference, which is discussed in this article.
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Format: HTML | Date: Aug 2003 | Pages: 1
