Exide Holdings, Inc. – Preference Defense Lawyer

On June 14, 2021, Peter Kravitz, as GUC Trustee of the GUC Trust of Exide Holdings, Inc., began filing complaints in adversary proceedings, pursuant to sections 547 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.

The Debtors in these chapter 11 cases are: Exide Holdings, Inc., Exide Technologies, LLC, Exide Delaware LLC, Dixie Metals Company, and Refined Metals Corporation.

Approximately 307 such complaints have been filed so far.

The bankruptcy case and these adversary actions are before the Honorable Christopher S. Sontchi.

Procedural History:

On May 19, 2020, each of the Debtors commenced a voluntary case under chapter 11 of the Bankruptcy Code.

On May 21, 2020, the Court entered an order authorizing the joint administration of the chapter 11 cases for procedural purposes pursuant to Bankruptcy Rule 1015(b) and Local Rule 1015-1.

On October 16, 2020, the Court entered an order confirming the Fourth Amended Joint Chapter 11 Plan of Exide Holdings, Inc. and Its Affiliated Debtors. In accordance with the Plan and Confirmation Order, the GUC Trust of Exide Holdings, Inc. was established.

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 Exide Holdings, Inc. or any of the 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.