RadioShack Preference Litigation Has Begun – En Masse

On February 5, 2015, RadioShack and various related entities filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  We initially published a blog post about the filing here: RadioShack Pulls the Plug.  On October 2, 2015, the Court confirmed the Plan of Liquidation in the RadioShack cases.  Pursuant to the Plan, the RSH Liquidating Trust was established, providing the Liquidating Trustee, Peter Kravitz, authority to prosecute preference actions.

From October 28, 2015 until the day this post was published, November 2, 2015, the Trustee has filed 383 (largely identical) preference actions.  The Trustee argues that the transfers, or payments, received by various defendants are avoidable and subject to recovery under 11 U.S.C. § 547 of the United States Bankruptcy Code.  In a majority of the complaints, the Trustee "acknowledges that some of the Transfers might be subject to defenses under Bankruptcy Code section