Deb Shops SDFMC LLC – Preference Defense Lawyer

Deb Shops SDFMC LLC

Between July 26 and July 29, 2015, Deb Shops SDFMC LLC, as debtor in possession for Deb Shops, Inc. and its affiliates, filed approximately 92 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the United States Bankruptcy Code.

Previously, Deb Shops, Inc. and its affiliates filed petitions for bankruptcy in the District of Delaware on December 4, 2014 under Chapter 11 of the United States Bankruptcy Code. These adversary actions and the Chapter 11 proceedings are before the Honorable Kevin Gross.

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 Deb Shops, Inc., 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.