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Go Back   Law Forums at Onlypunjab.com > BANKRUPTCY AND CONSUMER CREDIT > Business Bankruptcy

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  #1  
Old 01-12-2007, 04:13 AM
Autumn Autumn is offline
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Join Date: Apr 2006
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Default asking the paid money back!!

Hello guys,
I own an Incorporated small business and I specializes in commercial and industrial concrete work. I just received a subpoena from the US Bankruptcy Court. I guess my former customer was deemed insolvent at the time I did work for them, last year. I did not receive full payment. I paid my suppliers and employee labor with the money they did pay. According to the papers, the court wants me to return the money they paid to me. How can this be legal? Thank you!!
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Old 01-12-2007, 06:10 AM
Ian Ian is offline
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Join Date: Apr 2006
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Ofcourse, they can. It's called a "preference recovery action." It seems as if your customer filed a Chapter 11, and they have either confirmed a plan of reorganization, or recently converted to a Chapter 7. Sometimes it happens when the debtor filed a Chapter 7 originally, but trustees usually move faster in a new 7. There are several defenses to preference recovery actions, and
trustees/debtors in possession like to settle the cases. You need a lawyer immediately.
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