Last month, Jeoffrey Burtch, the Chapter 7 Trustee (the "Trustee") in the Opus East bankruptcy filed approximately 90 preference actions against various defendants. As stated in his complaints, the Trustee "seeks to avoid and recover ... all preferential transfers of property made for or on account of an antecedent debt made to or for the benefit of the Defendant by the Debtor during the ninety-day period prior to the filing of the Debtor's bankruptcy petition under 11 U.S.C. sec. 547 and 550." This post will look briefly at the Opus East bankruptcy proceeding, as well as provide some general information concerning defenses to preference litigation.
Opus East, LLC ("Opus East") filed a voluntary petition for relief under the Bankruptcy Code on July 1, 2009. Instead of filing a chapter 11 petition for reorganization, Opus East filed a chapter 7 petition for liquidation. On July 2, 2009, the Office of the United States Trustee appointed Jeoffrey Burtch as Trustee. Prior to filing for bankruptcy, Opus East developed residential and commercial properties. According to court papers filed by one of Opus East's lenders, Opus East originally intended to reorganize under chapter 11 and surrender various assets to the bank. Once the company determined that it was unable to reach an agreement with its lenders, Opus East sought to liquidate under the Bankruptcy Code.
At present, it appears that the Trustee has filed the preference complaints with the Court, but not the summons. Once filed, the summons will likely include an initial pretrial conference date and a certificate of service. It is common for a plaintiff in a preference action to serve complaints by mail. Below is a prior post I have written that addresses the validity of service by mail in bankruptcy proceedings:
The Opus East bankruptcy, as well as the preference actions filed by the Trustee, are before the Honorable Mary F. Walrath. Judge Walrath is a former Chief Judge of the Delaware Bankruptcy Court. The Trustee in these proceedings is represented by the law firm Cooch & Taylor, P.A. For readers not generally familiar with Delaware preference litigation, below are prior posts I have written on the subject: