Dura Automotive Systems, LLC – Preference and Fraudulent Transfer Defense Lawyer

On December 14, 2021, Plaintiff, Jeoffrey L. Burtch, as chapter 7 trustee for the below Debtors bankruptcy estates of the the below Debtors including Dura Automotive Systems, LLC, 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 14 such complaints have been filed.

The Debtors in these Chapter 7 Cases are: Dura Automotive Systems Cable Operations, LLC; Dura Automotive Systems, LLC; Dura Fremont L.L.C.; Dura G.P.; Dura Mexico Holdings, LLC; Dura Operating, LLC; and NAMP, LLC.

Procedural History:

On October 17, 2019, the Debtors commenced their Bankruptcy Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code.

On December 15, 2020, the Court entered an order converting the Bankruptcy Cases from chapter 11 to chapter 7 of the Bankruptcy Code.

On December 16, 2019, Jeoffrey L. Burtch was appointed as interim trustee and he now serves as trustee pursuant to 11 U.S.C. § 702(d).

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

Background, as alleged by Plaintiff:

“Prior to the Petition Date the Debtors were global Tier 1 automotive suppliers specializing in the design, engineering, and manufacturing of automotive products.”

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 the Dura Automotive System 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.