Anatomy of a Preference (Pre-2017 Version)
What is worse than your customer filing for bankruptcy? Having to give back the payments you collected in the three months before they filed. The theory behind the preference sections of the bankruptcy code are sound - equal distribution to all. In practice that is not how they are enforced. Defending against the pursuit and recovery of alleged preferential payments could cost creditors more than their initial claim for the outstanding receivables when a customer initially seeks bankruptcy protection.
This module will present the steps the credit professional can take to build a strong defense against preference claims and minimize the cost of legal fees. Practicing good Credit Department Hygiene and knowing your customers and their payment patterns and how they align with the allowable defenses of a preference, can better the creditor's position for a strong defense.
After successful completion of this module the student will understand the keys to a good defense against a preference claim, steps to take when a customer files bankruptcy, the elements of a preference, the Demand Letter, Statute of Limitations regarding preference claims, Contemporaneous Exchange, Ordinary Course of Business, and Subsequent New Value.
Val Venable, CCE has been the America’s Credit Manager for SABIC Innovative Plastics, formerly GE Plastics, since 2000 with responsibilities for credit, collections and risk management in five countries. She manages a portfolio consisting of over 50,000 accounts with customers in just about every industry including automotive, consumer products, chemicals, net media and the industrial and construction arenas. With over 25 years experience as a credit manager, Ms Venable has worked in the Aerospace, Steel and Metals and Marine industries, both domestic and international. She has lead education sessions at the NACM Credit Congress and the Metals and Steel, and the Food Services Industry Day Groups and has addressed various CFDD Affiliates.