Stephen Ganis explores two very possible scenarios which a small business owner could face. Both involve bankrupt counterparties and the concepts of preferential transfers. One scenario which a small business owner can face, according to Mr. Ganis, sees someone who owes the small business owner money filing for bankruptcy and transferring all his assets to a third party to prevent recovery. In another scenario, a company which availed itself of a small business's services files for bankruptcy, and the bankruptcy trustee seeks to recover the fees paid for those services as a preferential transfer. In this article, Mr. Ganis sets forth how the facts of each transaction can affect the small business owner's financial options.
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Breach of Contract and Getting Paid by a Debtor