ADI Liquidation, Inc. – Preference Defense Lawyer

Between September 7-8, 2016, multiple debtors — AW Liquidation, Inc. (f/k/a Associated Wholesalers, Inc.), WR Liquidation, Inc. (f/k/a White Rose Inc.), and RT Liquidation Corp. (f/k/a Rose Trucking Corp.) — in the bankruptcy of ADI Liquidation, Inc. et al. (f/k/a AWI Delaware, Inc) filed approximately 332 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the United States Bankruptcy Code.

Procedural History:

On September 9, 2014 (the “Petition Date”), ADILiquidation, Inc. (f/k/a AWI Delaware, Inc.), and affiliated entities (collectively, the “Debtors”) each filed in the United States Bankruptcy Court for the District of Delaware (the “Court”) a petition for relief under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).

The Debtors are as follows: ADI Liquidation, Inc. (f/k/a AWI Delaware, Inc.); AW Liquidation, Inc. (f/k/a Associated Wholesalers, Inc.); NK Liquidation, Inc. (f/k/a Nell’s, Inc.); Co-Op Agency Inc.; AL Liquidation, Inc. (f/k/a Associated Logistics, Inc.); WR Liquidation, Inc. (Vida White Rose Inc.); RT Liquidation Corp. (f/k/a Rose Trucking Corp.); WRSC Liquidation Corp. (f/k/a WR Service Corp.); WRSC II Liquidation Corp. (f/lc/a WR Service II Corp.); WRSC V Liquidation Corp. (f/k/a WR Service V Corp.); and White Rose Puerto Rico, LLC.

These adversary actions and the Chapter 11 proceedings are before the Honorable Kevin J. Carey.

Common Defenses in Preference Actions

The United States Bankruptcy Code provides many affirmative defenses to preference actions, contained within Section 547(c). For example, the most common defenses that may be available to a Defendant under Section 547(c) may include:

• the transfer was a contemporaneous exchange for new value given to the debtor (i.e., the debtor received something of value in exchange for the transfer); 11 U.S.C. §547(c)(1);
• after such transfer, Defendant gave new value to or for the benefit of the debtor (i.e., the Defendant extended additional credit to the Debtor after receiving the transfer) 11 U.S.C. §547(c)(4); or
• the transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the recipient (i.e., Defendant made the transfer under ordinary business terms). 11 U.S.C. §547(c)(2).

For more information, see our page on Preference Defense Litigation: http://www.tobialaw.com/practice-areas/delaware-preference-defense-lawyer/

If you conducted business with ADI Liquidation, Inc., Associated Wholesalers, Inc., White Rose Inc., Rose Trucking Corp. or any of the other above referenced Debtors, and especially if you have received a demand letter or complaint, contact us here, email us at info@tobialaw.com or call the firm’s Wilmington offices directly at (302) 655-5303 to schedule an initial consultation. We can discuss the situation and share with you our initial observations at no charge.