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Creditors say they suffer while trustees and attorneys reap the benefit of bankruptcy preferences.(headlines)
An arcane section of the bankruptcy code related to so-called "preference" payments is causing U.S. business creditors large and small to lose money just for doing their jobs. And they're not happy about it.
How much they lose is difficult to determine because most preference lawsuits are settled out of court and businesses have not separately tracked the staff time and legal expense they incur in fighting these actions. But the problem has grown worse in the last 10 years as business bankruptcies increased.
Under the code, a business that files for bankruptcy is assumed to have been bankrupt in the 90 days prior to filing and any payments made to ...
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Source: HighBeam Research, Creditors say they suffer while trustees and attorneys reap the...