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A Sweet Victory: New Value Defense Bolstered by Court’s Protection of Ice Cream Vendor

September 17, 2018Article
Small Enough to Fail Blog

You have fresh goods delivered to your largest customer daily, as has been the case for as long as you can remember.  You noticed over the last few months that payments have become less frequent—weekly instead of twice weekly—and occasionally have been paid over a week late.  On top of that, rumor in the industry is that your customer is suffering liquidity problems and may ultimately file bankruptcy.

So, what do you do? Stop deliveries, despite the fact that you are still receiving timely payments, and possibly exacerbate your customer’s cash flow problems? Or, do you continue delivering goods and accepting payments, which, if your customer ends up filing for bankruptcy, runs the risk of having a bankruptcy trustee seek to claw back any payments you received for an entire 90-day period before the bankruptcy was filed?

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