When Can a Trustee Claw Back Payments to Creditors?
March/April 2010

A number of considerations will arise when a business begins to falter. If the business owes you money, you will want to do what you can to make sure you get paid. If you manage the struggling business, perhaps you have personally guaranteed a loan to the company and worry about your individual liability. Perhaps you want to maintain good relationships with certain vendors if the company continues to operate, but others are not so essential. Maybe some of your larger creditors already know of your situation and are calling, demanding payment. All of these pressures coalesce to create a situation in which it is likely that a troubled business will unfairly prefer one creditor to another just prior to filing for bankruptcy.

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