Confidential
Settlement – $1,500Judge
Mediator
Attorneys
Plaintiff
Defendant
Facts
On April 25, 1995, debtor was forced into an involuntary Chapter 7 Bankruptcy. On the day before the statute of limitations barring such actions was to run, the Chapter 7 Trustee filed an adversary action in an attempt to recover what he asserted were preferential and fraudulent transfers which the debtor had allegedly made to defendant (debtor's sister-in-law) within one year prior to the filing of the involuntary Chapter 7 case. Debtor is a certified court reporter and defendant is a typist/transcriber. The defendant claimed she was employed by debtor to transcribe debtor's dictation of the stenographic records which debtor had taken and which defendant would transform into typed transcripts. The defendant alleged she would then deliver to debtor the typed transcripts, and at the same time, would deliver an invoice to the debtor. The defendant also alleged that if and when debtor would get paid, debtor would, in turn, pay defendant her share after debtor was paid so that essentially, defendant would not get paid until after the debtor received payment, whenever that might be. Per plaintiff, the defendant also claimed she could not repay the funds. The Chapter 7 Trusteee brought the adversary action against the defendant to attempt to recover the payments which the debtor made to the defendant which defendant alleged was for the work which the defendant did for debtor, up to a year prior to the date that the involuntary Chapter 7 petition was filed against the debtor. Because defendant is the sister-in-law of the debtor, she is considered an insider under the Bankruptcy Code. The Bankruptcy Code allows the Trustee to recover preferential transfers made to non-insiders within 90 days of the filing, and a year for "insiders."
Settlement Discussions
The plaintiff demanded $8,561.12. The defendant offered nothing.
Other Information
The settlement was reached approximately nine months after the case was filed. MEDIATION: A five-hour mediation was held before Jane DuBovy, a Panel Mediator for the U.S. Bankruptcy Court, Central District resulting in the reported settlement. The defendant will have an allowed claim of $1,500 against the Chapter 7 Estate as an unsecured creditor.
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