Diversified Mercury Communications, LLC – Preference and Fraudulent Transfer Defense Lawyer

On March 18, 2021, George L. Miller, solely in his capacity as the chapter 7 trustee of Debtors Diversified Mercury Communications, LLC and DTR Advertising, Inc. began filing adversarial complaints seeking to avoid preferential and/or fraudulent transfers made to individual defendants and recover the value thereof, pursuant to 11 U.S.C. §§ 547, 548, and 550, and objecting to the individual defendants’ claims. To date, approximately 13 such complaints have been filed.

The Liquidating Debtors in these cases are: Diversified Mercury Communications, LLC a/k/a Mercury Media (“DMC”) and DTR Advertising, Inc. (“DTR”).

Procedural History:

On April 3, 2019, an involuntary chapter 7 petition for relief was filed against DMC in this Court. On May 2, 2019, the Bankruptcy Court entered an Order for Relief in an Involuntary Case against DMC.

On May 23, 2019, DTR, an affiliate of DMC, filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code. On May 29, 2019, the Bankruptcy Court entered an order directing the joint administration of the Debtors’ chapter 7 cases.

George L. Miller was appointed chapter 7 trustee of the Debtors’ estates.

These adversary actions are before the Honorable Karen B. Owens.

Background, as alleged by Plaintiff:

Prior to the bankruptcy filings, the Debtors were a full service direct response media agency with various businesses, including short form, long form, and digital advertising media
businesses, under the name “Mercury Media.”

The Trustee seeks to avoid and recover from the individual defendants, or from any other person or entity for whose benefit the transfers were made, all preferential and/or fraudulent transfers of
property made by the Debtors to the individual defendants within the ninety-day preference period prior to the filing of the Debtor’s bankruptcy petitions pursuant to 11 U.S.C. §§ 547, 548 and 550.

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 Debtors Diversified Mercury Communications, LLC and/or DTR Advertising, Inc. and especially if you have received a demand letter or a complaint or if a complaint has been filed against you or your business even if not served yet, 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.