The Third Circuit held that a supplier may accept court-approved “critical vendor” payments post-petition from a debtor’s bankruptcy estate without fear that such payments will increase that supplier’s liability for payments received pre-petition. Friedman’s Liquidating Trust v. Roth Staffing Cos., 738 F.3d 547 (3d Cir. 2013) (No. 13-1712).  A primary goal for a supplier of a company in bankruptcy is to obtain “critical vendor” status whereby the debtor pays the supplier not only for goods or services provided during the course of the bankruptcy proceeding but also additional amounts for unpaid goods and services provided prior to bankruptcy.  In preference litigation, however, the “critical vendor” label has been a double-edged sword.  When a supplier is sued for a preference (payments received from the debtor within 90 days prior to the bankruptcy), the supplier may offset its liability by the amount of unpaid goods or services provided to the debtor after receipt of the alleged preference (the so-called “new value” defense).  Preference plaintiffs (particularly litigation trusts born out of a debtor’s bankruptcy) have found some success arguing that a “critical vendor” payment diminishes a preference defendant’s “new value” defense dollar-for-dollar.  In Friedman’s, the Third Circuit held that for purposes of a preference analysis, a plaintiff’s claim and a defendant’s defenses are evaluated as of the day the debtor filed bankruptcy.  In other words, payments made to preference defendants after the debtor’s bankruptcy filing are not considered in preference litigation.  The decision effectively removes one of the few potential downsides to obtaining critical vendor status.