GFX Holdings, LLC – Preference and Fraudulent Transfer Defense Lawyer

On March 31, 2022, Plaintiff Don A. Beskrone, as Chapter 7 Trustee for GFX Holdings, LLC, began filing complaints in adversary proceedings, pursuant to sections 547, 548, and/or 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 18 such complaints have been filed.

Background, as alleged by Plaintiff:

“Prior to the Debtor’s bankruptcy filing, the Debtor owned and operated a business that provided metal fabrication services. The Debtor offered drums, reactors, pressure vessels, skid-mounted process systems and equipment, thermal oxidizers, project management, engineering, and designing services.”

Procedural History:

On April 3, 2020, the Debtor filed a voluntary chapter 7 petition in the United States Bankruptcy Court for the District of Delaware.

On or around the same date, Don A. Beskrone, was appointed Chapter 7 Trustee of the Debtor’s estate. A meeting of creditors pursuant to 11 U.S.C. § 341 was held and concluded on May 12, 2020. Accordingly, the Trustee serves as the trustee in this case pursuant to 11 U.S.C. § 702(d). The Trustee has not filed a motion to operate the businesses of the Debtor pursuant to 11 U.S.C. § 721, and the Debtor currently has no business operations.

These adversary actions are before the Honorable John T. Dorsey.

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 GFX Holdings, LLC 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 and share with you our initial observations at no charge.