SportCo Holdings, Inc. – Preference Defense Lawyer

On June 8, 2021, Ronald J. Friedman, Esq., as trustee for the SportCo Creditors’ Liquidation Trust began filing complaints in adversary proceedings, pursuant to sections 547 and 550 of the Bankruptcy Code, seeking to avoid and recover certain transfers that were made by SportCo Holdings, Inc. and/or its affiliated debtors and debtors in possession to the individual defendant(s) within 90 days prior to the commencement of their Bankruptcy cases.

Approximately 67 such complaints have been filed so far.

The Debtors in these chapter 11 cases are: Bonitz Brothers, Inc.; Ellett Brothers, LLC; Evans Sports, Inc.; Jerry’s Sports, Inc.; Outdoor Sports Headquarters, Inc.; Quality Boxes, Inc.; Simmons Guns Specialties, Inc.; SportCo Holdings, Inc., and United Sporting Companies, Inc.

The bankruptcy case and these adversary actions are before the Honorable J. Kate Stickles.

Procedural History:

On June 10, 2019, each of the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code.

Thereafter, by order dated November 21, 2019, Ronald J. Friedman, Esq., was appointed Trustee of the SportCo Creditors’ Liquidation Trust.

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 SportCo 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.