Richards Layton & Finger

Delaware Bankruptcy Court Rules in Antecedent Debt Case

January 27, 2015

Can a plaintiff state a preference claim by generally alleging that one or more of the debtor entities made the transfer at issue on account of an antecedent debt? The Delaware Bankruptcy Court (the Honorable Mary F. Walrath, presiding) recently reminded plaintiffs that the answer is no. See Stanziale v. DMJ Gas-Marketing Consultants, LLC. In DMJ, the defendant moved to dismiss the plaintiff’s preference claim including on the grounds that the plaintiff had parroted the statutory language when alleging an antecedent debt and failed to identify the specific debtor that made the transfer at issue. To survive a motion to dismiss, the Court noted that a plaintiff must include in its complaint: (a) an identification of the nature and amount of each antecedent debt; and (b) an identification of each alleged transfer by (1) date, (2) name of transferor, (3) name of transferee, and (4) amount of transfer.

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