An avoidance action is typically commenced by either a debtor, trustee, or a duly authorized creditors’ committee. The avoidance action is commenced by the filing of an adversary proceeding complaint with the clerk of the bankruptcy court. Typically, trustee is seeking to reject, or “avoid,” actions taken with respect to debtor’s property during a specific statutory time period prior to the bankruptcy filing. Avoidance actions are typically brought against corporations and individuals who have received payments from the debtor within 90 days of the filing, or with one year if to an insider or relative. There are primarily two types of avoidance actions, preferences actions and those seeking to avoid fraudulent transfers.
For further information on this topic or to discuss your case, please contact Richard E. Weltman or Michael L. Moskowitz by telephone, fax or email.
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