Earlier this month, the Chapter 7 Trustee for the Rehrig International bankruptcy estate filed several preference actions against various defendants. As set forth in the complaints, the Trustee seeks to avoid and recover payments which he contends are preferential transfers, fraudulent conveyances and/or postpetition transfers. Rehrig filed for bankruptcy on September 5, 2008. Less than four months later, Rehrig’s Chapter 11 proceedings were converted to cases under chapter 7. Soon after the conversion to Chapter 7, the Office of the United States Trustee appointed George L. Miller as the Chapter 7 Trustee.

As is common in avoidance actions, the Trustee in Rehrig seeks an order disallowing the defendants’ claims pursuant to 502(d) of the United States Bankruptcy Code. Under 11 U.S.C § 502(d), the Bankruptcy Court “shall disallow any claim of any entity from which property is recoverable” under sections 547 and 548. Under 502(d), a defendant’s claim is temporarily disallowed if a creditor holds a debtor’s property.  Although a creditor’s claim can be disallowed under 502(d), section 502(h) of the Code grants a preference defendant an allowed claim for preference dollars paid back in to the estate as part of a settlement or judgment.

According to papers filed with the Court, a pretrial conference is scheduled in the Rehrig preference actions on November 18, 2010 at 1:30 p.m. The Chapter 7 Trustee is represented by Cozen & O’Connor.