Assertion of a preference action

[chesbrough]

Massachusetts
A company that went bankrupt owing me money may file to get monies returned to the bankruptcy estate that were paid to me within 90 days previous to the bankruptcy filing. What is the basis that they can actually get a judgement to do this?

 

[Texas Pooh]

The law.

Bankruptcy laws allow for the trustee to recover any monies paid to any creditor within the preference period, which is 90 days prior to the bankruptcy filing.

The preference period exists so that a entity that is about to be bankrupt does not pay certain creditors to the detriment of others.