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Under Chapter 11 procedures, Secured Creditors will receive payment before the next class of Creditors?those with unsecured claims.
The standard lookback period is 90 days prior to filing. That means the trustee can examine payments to creditors in the 90 days leading up to filing and take action on any preferential payments.
The limitations period for preference claims is the later of (1) two years from the date the bankruptcy case was commenced, or (2) one year from the date the trustee was appointed if the court-appointed a trustee. Sometimes, there are other grounds to extend the limitation periods of a claim.
A party involved in a bankruptcy case can start an adversary proceeding by filing a complaint. This will describe the basis for the lawsuit and ask the court to provide a remedy for this party, known as the plaintiff.
This statute provides that when a debtor makes a payment to a creditor and the debtor files bankruptcy within 90 days of that payment, the Bankruptcy Court can force the creditor to pay that money back to the debtor for distribution to all of the debtor's creditors.