• Robbing from Peter to Pay Paul to Pay Peter: Has Preference Litigation and the Policy of "Equality of Distribution" Run Amok?
  • May 17, 2004 | Author: Stacey Cowand Jernigan
  • Law Firm: Haynes and Boone, LLP - Dallas Office
  • One of the most fundamental of all bankruptcy policies is the policy of equality of distribution among similarly situated creditors. The Bankruptcy Code's preference statute, 11 U.S.C. ยง 547, is one of the primary tools designed to ensure adherence to this policy. In recent years, however, a trend has emerged in many large Chapter 11 cases that is arguably perverting the policy. More specifically, particularly in liquidating Chapter 11 cases, the trend is to initiate preference litigation on a widespread basis.