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Triangular setoff: a viable remedy or a thing of the past?(Column)
A trade creditor that sells goods or provides services on credit terms to a financially distressed customer risks an uncollectable unsecured claim in the event of the customer's bankruptcy filing. However, the creditor could enhance its recovery prospects when the creditor and customer do business and have mutual claims against each other that are subject to setoff.
Setoff rights serve as valuable security for payment of a trade claim. For instance, suppose a trade creditor sold goods to a financially distressed customer and is owed $100,000. At the same time, the customer sold goods to the creditor and is also owed $100,000. The customer then files for ...
- A trade creditor's setoff rights in bankruptcy: no slam dunk.(CREDIT...
- Magazine article from: Business Credit Nathan, Bruce S. January 1, 2006 700+ words
...100 percent of its claim against the creditor while limiting the creditor to the di minimus distribution that...the debtor's other unsecured trade creditors. A trade creditor's setoff rights were at issue in U.S. Aeroteam...
- Preserving a Creditor's Setoff Rights.
- News wire article from: Mondaq Business Briefing September 20, 2005 700+ words
...bright line rule that the creditor waives its setoff rights. Other courts such...of claim, then the creditor may lose its setoff rights under general rules...that precluded another creditor's setoff rights. The plaintiff, Southeast...
- Supreme Court gives victory to banks
- Magazine article from: The Secured Lender Antoszyk, Peter J March 1, 1996 700+ words
...contested area of debtor-creditor relations. The Supreme...in order to preserve setoff rights in bankruptcy. This...debtor to defeat a creditor's right to setoff...account subject to setoff rights to the debtor and preserve the right of a creditor to offset mutual debts...
- Section 503(b)(9) goods supplier priority--more recent developments.(credit...
- Magazine article from: Business Credit Nathan, Bruce January 1, 2008 700+ words
...secured trade creditor can assert a...the debtor's setoff rights arising from...against the creditor. And the United...b)(9) creditors' committee...amp; Cole's setoff rights attributable...Available to Secured Creditors The Ninth Circuit...as a secured creditor ...
- Setoff involving an insolvent carrier is resisted. (Prudential Reinsurance Co....
- Magazine article from: Risk Management Wright, P. Bruce April 1, 1990 700+ words
...commissioner denied setoff rights on the grounds that...claimant. In addition, setoff rights were denied on grounds...insurer as the principal creditor to the debts owed the...liquidator as trustee for the creditors of the insolvent. Thus...
- IRS Allowed to Offset Debtors' Tax Overpayment Against Unpaid Debt.(Internal...
- News wire article from: Mondaq Business Briefing December 9, 2005 700+ words
...relief and listed the IRS as a creditor, as the debtors owed unsecured...Pigotts identified the IRS as a creditor owed a total of $10,236...prepetition debts between debtor and creditor, and a right to setoff exists...setoff, it does preserve setoff rights that are otherwise present...
- Judge Confirms Orange County, Calif., Recovery Plan.(Originated from The Orange...
- Newspaper article from: Knight Ridder/Tribune Business News Campbell, Ronald May 16, 1996 700+ words
...not in the best interest of creditors. After 18 months in court...for their services. Private creditors have paid millions more...case. Chapter 9 deprives creditors of much of the leverage they...proposed denying them these "setoff" rights. Merrill and KPMG also tried...
- High Court Lets Banks Freeze Accounts; Ruling Arises From Case of Maryland Man...
- Newspaper article from: The Washington Post Joan Biskupic November 1, 1995 700+ words
...any action his bank or other creditors could take against his accounts...While the bankruptcy code gives creditors "setoff" rights, or the ability to offset a...assets, it requires that a creditor seek permission from a judge...
Source: HighBeam Research, Triangular setoff: a viable remedy or a thing of the past?(Column)