It seemed like such an innocent article, so righteous, so true and on point. It detailed how the “good guys” had gone after the “bad guys” and gotten money back for the innocents. And in return, they had agreed not to go after the “bad guys” in court. What a victory!
The article to which I am referring ran on our own daily e-newspaper Friday. It details how attorneys for the creditors’ committee in the Trainor bankruptcy have been able to recover nearly $500,000 that they allege was paid inappropriately to creditors in the months prior to the bankruptcy filing. Again, I say BULL.
Those of us who have been on the receiving end of this tactic know it well. It’s a subject about which I have written a number of times. It usually starts with a demand letter from a law firm hired by the creditors’ committee to go after just about every company that received a check from the now-bankrupt firm during the last 90 days of its existence. These law firms, which specialize in such actions, assume that just about all outlays in the final 90 days are suspected of being “preferential” and should be returned. So they send demand letters and threaten suits and put the onus on the unlucky recipient to “prove” that they deserved to be paid that money.
Faced with the choice of a protracted legal battle or just returning all or a portion of their payments, most companies do the latter. What makes it particularly insidious is that many of the companies being asked to return cash are also still creditors for additional monies owed.
Just ask Kris Vockler of ICD. Her company went through it a number of years ago and she attempted to do something about it, but those paid in the last 90 days are still on the hook.
Me, I’d like the name of Kawneer’s lawyer, although I am guessing they may have in-house counsel and/or have to deal with this so often that they have a great documentation system in place, as they ended up returning only 4 percent of what was requested, versus upwards of 30 percent from other companies.
There was some very good news from Lyle late last week. He has completed his treatment, including the stem cell transplant, and was able to be released from the hospital a few days before expected because his numbers and counts and such were so good. So, unless something changes, he is pretty much done with his treatment and will spend the next month or two building his strength back up. Prayers are still most welcome.