BANKRUPTCY UNFAIR PREFERENCE 🚨 according to a recent decision, payments made from the trust account of a lawyer to a petitioning creditor are susceptible to claw-back under s 122 of the Bankruptcy Act.
… even if the trust monies were sourced from a related third party entity (ie it was never the Bankrupts money).
… and even if the monies total less than $40k.
Unfair preferences are typically clawed back where the bankrupt’s monies are paid to a creditor in preference/priority to other creditors, at a time when the bankrupt was insolvent.
In my experience, cases involving third party monies are getting harder and harder to prosecute in the corporate regime, but very interesting see how broad the Federal Circuit Court is now willing to go in the bankruptcy regime.
What’s your view on this – voidable or not?
Link to the case – https://jade.io/article/726808?at.hl=%255B2020%255D+FCCA+934
Also, I couldn’t help myself with the picture, happy Friday‼️