Bankruptcy preference claims are always an unpleasant surprise. They are frustrating and, in many circumstances, are unjust because they allow a bankruptcy trustee or the debtor to clawback money you received in exchange for providing valuable labor, services, or products.
Bankruptcy court is often the “court of bad news” for creditors. In particular, subcontractors and suppliers face unique challenges when a customer files for bankruptcy. But they also have unique rights that may elevate their claims. Failing to act quickly and correctly on those rights can have significant consequences.