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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2897
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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MY COMPANY IS BEING SUED BY THE TRUSTEE FOR A FIRM WITH WHICH

Customer Question

MY COMPANY IS BEING SUED BY THE TRUSTEE FOR A FIRM WITH WHICH I DID BUSINESS 2 YEARS AGO. DURING THAT TIME, I WAS PAID APROX $27K FOR APPRAISALS WHICH I PERFORMED FOR THIS BUSINESS (A BUILDER). NOW, I RECEIVED A LETTER SAYING THE TRUSTEE IS SUING ME FOR THE $27K AND IN ADDITION WANTS $21K IN JUDGEMENTS WHICH I HAVE RECORDED SET ASIDE. THE CLAIM IS THEAT THE DEBTOR WAS INSOLVENT AT THE TIME OF PAYMEN6T (2006 THRU 2007) AND THAT THE SERVICES I PERFORMED WERE OF NO VALUE TO THE BANKRUPT COMPANY.
THERE IS A PRE TRIAL HEARING SET FOR MAY 25TH. I CANNOT AFFORD AN ATTORNEY AT $300/HR. WHAT ARE MY OPTIONS???
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
Hi and thank you for your question.
I would advise you, despite the cost, hire that lawyer!!
You are facing having to turn over $27000 for the appraisals, and have the other $21k in judgments eliminated set aside and having that turned over to the trustee as well.

When a company files bankruptcy, the trustee steps in to liquidate assets to pay the creditors. The trustee has the power to go back and look at the financial events, and set aside many of them if they were done while the company was insolvent and if any of them were preferential.

You can fight this, and possibly win this argument, so that is why it is important to hire a bankruptcy attorney. If the transactions were in the ordinary course of business, you may have a chance to lessen the amount. Your attorney would also attack the premise that the debtor company was insolvent at the time of the transaction, because that date is crucial - transactions in the ordinary course of business before insolvency are fine, any after are not.
Thanks for your question, and good luck.