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Avoidance claims analysis

Preference Analysis Methodology


ASK LLP determines a historical baseline based on the weighted average invoice to payment date (or by days past due) for the following potential "baselines":

1. The two year payment history.

2. The two year history,excluding the 90 days before the start of the preference period.

3. The one year payment history

The weighted average for each time slice is computed based on (i) all invoices and (ii) after excluding the outliers (top/bottom 10 %). This process generates several weighted averages.

We then calculate the weighted averages under both methods for the Preference Period using our proprietary software.

We next compare the weighted average results for the two time periods, and can determine the appropriate variation between the preference and historical period.

We then determine an acceptable swing of days +/- of the historical weighted average to create an "OCB From" and "OCB To" range of days. Preferential transfers that fall within this range would be treated as within the ordinary course of business (unless the transaction was already eliminated by new value).

Finally, we run two analyses: One where new value is calculated first and the OCB range is applied to the remaining at issue transactions. The result is the Net Preference Claim. Next, we run an analysis where the ordinary course of business is applied first, and new value is applied to the remaining at issue transactions.

The following are some of the reports our proprietary software generates:

Report 1
Report 2
Report 3
Report 4