ANALYSIS: Behind Bankruptcy’s Low 2022 Preference Case Totals

Earlier this year, I predicted an uptick in preference cases in 2022 because of the pandemic-generated rise in Chapter 11 cases in 2020. But this year’s data tells us a different story.

The Bankruptcy Code’s two-year statute of limitations for bringing avoidance actions (including preference cases) often means that if there’s a wave of Chapter 11 filings one year, there will be a corresponding wave of preference actions two years later.

However, in my examination of adversary proceeding complaints using the Nature of Suit (NOS) code for preference for Bloomberg Law’s Chapter 11 Petitions and Litigation: Midyear 2022 Report, ...