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"Critical vendor" status is no escape from preference risk.(CREDIT COLUMN)(Fultonville Products)(Howell Electric Motors)
Credit grantors continue to hear about bankruptcy cases where the courts have approved a debtor's payment of the prepetition unsecured claims of "critical vendors". Sometimes a credit grantor is lucky enough to be one of the "chosen ones," selected as a critical vendor to receive payment of its unsecured claim. Despite the ruling of the Seventh Circuit Court of Appeals in the Kmart case, that suggested a drastic limitation on a debtor's ability to pay the pre-petition unsecured claims of critical vendors, the courts (particularly outside of the Seventh Circuit) have continued to approve the payment of critical vendors' pre-petition unsecured claims, conditioned upon the ...
- The dirty little secret of critical vendor orders: the hidden preference risk...
- Magazine article from: Business Credit Nathan, Bruce S. February 1, 2005 700+ words
...its prepetition claim under the critical vendor order. The debtors ultimately...Export's arguments was that the critical vendor order protected Export from preference risk. Export claimed the critical vendor order entitled it to payment...
- Real estate material and services suppliers, rejoice! Recent favorable court...
- Magazine article from: Business Credit Nathan, Bruce S. October 1, 2005 700+ words
...defendants that performed construction-related services for the debtor within the 90-day preference period, were free from preference risk where--in the absence of the payments--the defendants had the right to perfect a fully secured statutory mechanics...
- The critical vendor roller coaster.(credit column)
- Magazine article from: Business Credit Nathan, Bruce February 1, 2008 700+ words
The critical vendor doctrine has had its ups and downs...drastic cutback of availability of critical vendor relief. Some commentators went as far to pronounce the death of the critical vendor doctrine in light of the Kmart decision...
- Seventh Circuit Deals Blow to Critical Vendor Doctrine.(Kmart bankruptcy case)
- News wire article from: Mondaq Business Briefing June 16, 2004 700+ words
...deemed critical, provided that such "critical vendor" agreed to furnish goods on "customary...voluntarily return the payments. The "critical vendor" doctrine, which is routinely applied...reorganize. The application of the critical vendor doctrine results in the critical vendors...
- The Critical Vendor Doctrine.
- News wire article from: Mondaq Business Briefing February 10, 2004 700+ words
...with the development of the "critical vendor doctrine", creditors may have a meaningful alternative. The critical vendor doctrine applies to vendors...The authority for granting critical vendor status stems from the Bankruptcy...
- Party Ordered To Disgorge $1.25 Million 'Critical Vendor' Payment.
- News wire article from: Mondaq Business Briefing April 17, 2008 700+ words
...25 million payment it had received under critical vendor orders. However, the seemingly harsh...subsequently by final order (collectively, the "Critical Vendor Orders"). The Critical Vendor Orders specifically provided that if a...
- An end to complacency: the 7th Circuit rules against critical vendor...
- Magazine article from: Business Credit Borges, Wanda May 1, 2004 700+ words
...the last several years regarding "critical vendor" treatment has come to an end. This...discussion of the background to "critical vendor" payments. History The concept of "critical vendor" is older than the Bankruptcy Code...
- GM aims to pay key suppliers; "Critical vendor' list would be filed with...
- Magazine article from: Crain's Detroit Business Beene, Ryan June 1, 2009 700+ words
...suppliers and logistics providers would be included in any "critical vendor motion included in a GM bankruptcy. If approved by the...Southfield-based Plante & Moran P.L.L.C., says critical vendor status will keep some suppliers from going belly-up...
Source: HighBeam Research, "Critical vendor" status is no escape from preference risk.(CREDIT...