HRB Winddown, Inc. – Preference and Fraudulent Transfer Defense Lawyer

On December 14, 2021, Plaintiff Alan D. Halperin, as Liquidating Trustee of the High Ridge Brands Liquidating Trust began filing complaints in adversary proceedings, pursuant to sections 547, 548 and 550 of the Bankruptcy Code, seeking to avoid and recover certain transfers made to the individual defendant(s) within 90 days prior to the commencement of the Debtors’ Bankruptcy cases, and to disallow any claims held by the individual defendants. To date, approximately 84 such complaints have been filed.

The Debtors in these Chapter 11 Cases are: High Ridge Brands Holdings, Inc.; HRB Midco, Inc.; HRB Buyer, Inc. ; HRB Winddown, Inc. (f/k/a High Ridge Brands Co.); GSI Winddown, Inc. (f/k/a Golden Sun, Inc.); CFL Winddown, Inc. (f/k/a Continental Fragrances, Ltd.); FCI Winddown, Inc. (f/k/a Freshcorp, Inc.); COC Winddown, LLC (f/k/a Children Oral Care, LLC); and DRF Winddown, LLC.
(f/k/a Dr. Fresh, LLC).

Procedural History:

On December 19, 2019, each of the Debtors commenced a voluntary case under chapter 11 of the Bankruptcy Code.

On December 19, 2019, the Court entered an order authorizing the joint administration of the chapter 11 cases for procedural purposes.

On October 8, 2020, the Court entered its Findings of Fact, Conclusions of Law, and Order Approving and Confirming the Second Amended Combined Disclosure Statement and Joint Chapter 11 Plan of Liquidation of High Ridge Brands Co. and Its Affiliated Debtors.
In accordance with the Plan and Confirmation Order, the High Ridge Brands Liquidating Trust was established as of October 30, 2020. Retained Estate Causes of Action (as defined in the Plan), including avoidance actions under Chapter 5 of the Bankruptcy Code, were transferred to the Trust.

These adversary actions are before the Honorable Brendan L. Shannon.

Background, as alleged by Plaintiff:

“. . . the Debtors were one of the ten largest independent branded personal care companies in the United States by volume. The Debtors, headquartered in Stamford, Connecticut, held a diverse portfolio of over fourteen trusted brands across a wide variety of market segments with a particular focus on skin cleansing, hair care, and oral care, many of which are household names that enjoyed strong brand recognition with consumers. In the United States, the Debtors operated in the $8.3 billion skin cleansing, $13.1 billion hair care, and $8.6 billion oral care categories. The Debtors sold their products, and had a track record of effectively launching new products, across multiple retail channels including mass market, dollar, grocery, and drug stores.”

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 any of High Ridge Brands Co. or its affiliated debtors and especially if you have received a complaint or a demand letter, 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 you are facing and share with you our initial observations at no charge.