UCLA School of Law
The Problem with Preferences
- Author(s): Bussel, Daniel
- et al.
Published Web Locationhttps://ssrn.com/abstract=2520163
This paper critiques Brook Gotberg’s recent proposal to reform preference law by creating a new safe harbor for preferences in chapter 11 while repealing certain existing preference defenses in chapter 7. The proper path of reform in this area would preserve preference recovery as a feature of chapter 11 reorganization law while raising the monetary limits on minimum recoveries, restricting financial contract safe harbors and bolstering ordinary trade creditor defenses across both chapter 11 and chapter 7.