Starting on February 18, 2021, Insys Liquidation Trust (“Insys Trust”), the liquidation trust appointed by the United States Bankruptcy Court for the District of Delaware to prosecute claims on behalf of Insys Therapeutics, Inc., filed approximately 53 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548, 549 and 550 of the Bankruptcy Code, along with the disallowance of claims under Section 502(d) of the Bankruptcy Code.
By way of background, on June 10, 2019, Insys Therapeutics, Inc. and its affiliated companies (collectively, the “Debtors”) filed petitions in the United States Bankruptcy Court for the District of Delaware seeking relief under chapter 11 of the United States Bankruptcy Code. The Insys Trust was appointed to prosecute avoidance action claims on behalf of the estate.
The Insys Trust filed a Motion for an Order Establishing Streamlined Procedures Governing Adversary Proceedings Brought by Plaintiff Pursuant to Sections 502, 547, 548, 549 and 550 of the Bankruptcy Code (“Procedures Motion”). Through the Procedures Motion, the Insys Trust has proposed procedures to govern mediation, pretrial conferences and discovery in each of the adversary proceedings filed in the Insys bankruptcy proceeding.
For a primer on various defenses that can be raised in response to avoidance actions filed to seek the recovery of transfers under Section 547 of the Bankruptcy Code, the following article is a helpful read: A Primer on Defenses to Bankruptcy Preference Claims.
Carl D. Neff is a partner with the law firm of FisherBroyles, LLP, and practices in Delaware. You can reach Carl at (302) 482-4244 or at Carl.Neff@FisherBroyles.com.