Knowledge Center

Monday, August 18, 2014

Practical and Proactive Tips for Dealing with Preference Actions

By Jason M. Torf

NACM Credit and Financial Development Division Newsletter
August 2014

"Why are we being sued? We didn't do anything wrong.
All we did was get paid!"

This is a very common refrain heard from credit departments when faced with a preference demand letter or lawsuit. A preference claim is the ultimate "no fault" cause of action. When you ship goods or provide a service, you expect to be paid. When you do receive payment, you do not expect to have to return it, particularly where no extraordinary collection efforts were involved. Becoming the subject of a preference action can be very frustrating. One good way to temper that frustration, however, is to be prepared. Understanding the most common defenses and the documents and data you will need to assert those defenses will ensure that you are in the best possible position to deal with a preference demand letter or lawsuit.

To read the full version of the article, please click HERE.

The mission of the NACM Credit and Financial Development Division is to develop tomorrow's business leaders through core offerings.

NACM, the National Association of Credit Management, is the voice of "business credit" in America. NACM's members, nearly 16,000 strong, represent a wide variety of businesses from Fortune 500s to small companies. As the grantors of business credit, our members make daily business credit decisions. The decisions they make play an integral role in the U.S. economy. The business credit executive - the NACM member - is an essential player in the free enterprise system.

NACM, through a variety of publications and its web site, reaches more than 35,000 business credit professionals. NACM Membership has grown from 600 at the end of 1896 to almost 16,000 today, making the National Association of Credit Management one of the oldest and largest business organizations in the United States.

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