A Case Study on Hot Topics in Preference Litigation

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A Case Study on Hot Topics in Preference Litigation

June 27, 2024 | Virtual

Hosted by ABI's Unsecured Trade Creditors Committee

This mock mediation, based on the Southern District of New York’s (SDNY's) recent preference decision in The Great Atlantic & Pacific Tea Company, Inc. bankruptcy cases involving McKesson Corp., will demonstrate how plaintiff, defendant and mediator analyze risk and preference exposure when trying to reach a mediated settlement. The SDNY’s decision followed two summary-judgment motions filed by McKesson, but this webinar will assume that this is a pre-summary-judgment mediation. The panelists will discuss the three issues decided by the court: (1) whether McKesson could include paid new value as part of its new value defense (i.e., whether the subsequent advance vs. remains-unpaid approach is appropriate); (2) whether McKesson could set off its § 503(b)(9) claim (i.e., its 20-day claim) against preference liability (i.e., mutuality as to when a § 503(b)(9) claim and preference claim arise); and (3) whether the amounts in McKesson’s § 502(h) claim, which paid invoices for 20-day § 503(b)(9) goods, should be a general unsecured claim that recovers $0, or a higher priority § 503(b)(9) claim, which could theoretically recover 100% if a plan was confirmed, but would recover much less here, as the cases were administratively insolvent and structurally dismissed. A fourth issue that the SDNY implicitly addressed was whether there is improper double-dipping where there is an allowed § 503(b)(9) claim (either paid or reserved for) that a claimant seeks to also include as part of its new value calculations (i.e., Auriga Polymers and, analogously, Friedmans).

Thursday, June 27, 2024

1:00-2:15 PM EDT

This webinar is free to attend, and CLE is available to members in qualifying states.*

Leslie A. Berkoff
Moritt Hock & Hamroff LLP; Garden City N.Y.

Kara E. Casteel
ASK LLP; Saint Paul, Minn.

Eric S. Chafetz
Lowenstein Sandler LLP; New York

Michael Papandrea
Lowenstein Sandler LLP; Roseland, N.J.

Gary D. Underdahl
ASK LLP; Saint Paul, Minn.

* 1.25 hours of general CLE credit are available in the following pre-approved 60-minute-hour states (1.5 hours in 50-minute-hour states): AK, AL, AR, CA, DE, GA, IL, MO, NJ, PA, SC, TN, TX, VT, WI and WV. These states follow an approved-jurisdiction policy: AZ, CO, CT, NH and NY. ABI will submit attendance to DE, IL, NV, PA, TN and TX. Attendees from Illinois claiming credit more than 30 days after an event will be charged the $25 Illinois late-credit claim fee that went into effect on Jan. 1, 2020. For those jurisdictions not listed, ABI will not seek direct accreditation; attorneys will need to self-submit. Some states might not allow self-submission. ABI will issue certificates for attorneys to self-submit for approval. ABI charges an administrative fee of $5 for Members and $25 for non-members upon requesting CLE credit for this program. Further details will be provided the day of the event.