COURT HOLDS THAT LATE PAYMENTS ARE UNORDINARY REGARDLESS OF LACK OF COLLECTION PRESSURE.
ASK has secured another victory for Eugene I. Davis, the Litigation Trustee for the Quebecor World Litigation Trust in his preference suit against Clarklift-West, Inc. On October 14, 2014, the U.S. Bankruptcy Court for the Southern District of New York issued an opinion holding that preference period payments made an average of 27.5 days later than historical period payments are unordinary. Although the defendant pointed to the Pameco factors and noted that there was no collection pressure or change in payment method, the Court determined that late payments are “presumptively nonordinary” and that the presumption could only be rebutted by showing that late payments were the parties’ standard course of dealing.
The Clarklift-West decision comes on the heels of another ASK win for Mr. Davis and the Quebecor World Litigation Trust. On April 23, 2013, the Court determined that the two year lookback period proffered by the plaintiff was more appropriate than the one year lookback period proffered by the defendant because it more accurately depicted the time when Quebecor was financially healthier. The Court also rejected the defendant’s use of the total range method as impermissibly expanding the ranges of ordinary transactions. To view these opinions, click here.