Insys Therapeutics, Inc. – Preference Defense Lawyer

On February 18, 2021, Insys Liquidation Trust, by and through William Henrich, as liquidating trustee 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, 549 and/or 550, and objecting to the individual defendants’ claims. Approximately 55 such complaints were filed between February 18 and February 25, 2021. The Trust began a second round of such filings on April 16, 2021; so far, approximately 31 additional complaints were filed.

The debtors in these cases are: Insys Therapeutics, Inc., IC Operations, LLC, Insys Development Company, Inc., Insys Manufacturing, LLC, Insys Pharma, Inc. IPSC, LLC, and IPT 355, LLC.

Procedural History:

On June 10, 2019, the Debtors each commenced a voluntary case under chapter 11 of the Bankruptcy Code.

On January 16, 2020, this Court entered an order confirming the Second Amended Joint Chapter 11 Plan of Liquidation of Insys Therapeutics, Inc. and Its Affiliated Debtors in the Chapter 11 Cases. On February 18, 2020, the Plan became effective and William Henrich was appointed the Liquidating Trustee of the Liquidation Trust.

These adversary actions are before the Honorable John T. Dorsey.

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 pages on Preference Defense Litigation: http://www.tobialaw.com/practice-areas/delaware-preference-defense-lawyer/ and Fraudulent Transfer Defense Litigation: https://www.tobialaw.com/practice-areas/delaware-preference-defense-lawyer/defense-of-fraudulent-transfer-actions/

If you conducted business with Insys Therapeutics, Inc. or any of the related debtors, and especially 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.