Did Outboard Marine Corporation file for bankruptcy?

If you were paid by Outboard Marine Corporation recently, read this before you spend it. A trustee can sue to take back money the company paid you in the 90 days before it filed. The statute reaches any transfer made "on or within 90 days before the date of the filing of the petition" (11 U.S.C. 547(b)(4)(A)).

We do not hold a petition date for this case, so the window cannot be dated here. It is the 90 days immediately before whatever date the petition was filed, and the docket carries that date.

Inside that window the law starts from the assumption the company was broke. 11 U.S.C. 547(f) says the debtor "is presumed to have been insolvent" during those 90 days, so nobody has to prove it was insolvent when your payment cleared. That is a presumption applied inside a preference action, and it is not a ruling that the company was insolvent for any other purpose.

There are real defences and suppliers win on them. The common one is that the debt and the payment were both ordinary course between you and this customer, or the payment was made on ordinary business terms (11 U.S.C. 547(c)(2)). Others cover getting paid at the same time you delivered (11 U.S.C. 547(c)(1)) and shipping more goods after the payment (11 U.S.C. 547(c)(4)). Since 2019 the trustee also has to act "based on reasonable due diligence" and take account of defences they know or could reasonably know about (11 U.S.C. 547(b)).

The exact small-dollar floor depends on when the case began. In a case where the debts are not primarily consumer debts, a transfer below a threshold amount cannot be avoided under this section (11 U.S.C. 547(c)(9)). That amount is adjusted for inflation every three years, "on April 1, 1998, and at each 3-year interval ending on April 1 thereafter" (11 U.S.C. 104(a)), and 11 U.S.C. 104(c) says each adjustment "shall not apply with respect to cases commenced before the date of such adjustments". So the figure that governs is the one in force when this case was commenced, not the current one. We publish the current amount and the one before it, and this case predates both, so the number for it is one to get from the docket or a lawyer. The $5,000 printed in the statute itself is the un-adjusted figure and has not been the operative amount since 2007.

Demand letters on preference claims go out routinely and often get reduced or dropped. The useful response to one is your payment history and a bankruptcy lawyer. Nothing here is legal advice and none of it is a prediction about your situation.