Welded Construction, L.P. – Preference Defense Lawyer

On October 20, 2020, Debtors Welded Construction, L.P and Welded Construction Michigan, LLC filed approximately 39 complaints, seeking to avoid and recover (1) alleged preferential transfers of property that occurred during the ninety (90) day period prior to the commencement of the bankruptcy proceedings pursuant to sections 547 and 550 of the Bankruptcy Code and (2) to avoid and recover from Defendant or any other person or entity for whose benefit transfers were made pursuant to sections 548 and 550 of the Bankruptcy Code any transfers that may have been fraudulent conveyances.

Procedural History:

On October 22, 2018, each of the Debtors commenced voluntary cases under Chapter 11 of the Bankruptcy Code. These cases are Jointly Administered.

These adversary actions are before the Honorable Christopher S. Sontchi.

Background, as alleged by Plaintiff:

As of the Petition Date, the Debtors were a mainline pipeline construction contractor headquartered in Perrysburg, Ohio….Prior to the Petition Date, the Debtors, as a mainline pipeline construction contractor, maintained business relationships with various business entities, through which the Debtors regularly purchased, sold, received, and/or delivered goods and services.

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 Debtors Welded Construction, L.P and Welded Construction Michigan, LLC, especially if you have received a demand letter or a complaint 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 and share with you our initial observations at no charge.