Liberty Mut. Ins. Co. v. New York (In re Citron)
May
06
2010
Ruling
Payment by debtor as part of plea agreement was preferential and avoidable.
Procedural posture
Adversary plaintiff, an insurer and the primary creditor of the husband and wife debtors, sought to avoid and recover a $ 75,000 criminal fine paid by debtor husband to defendant state as part of a plea agreement related to several felony counts of insurance fraud, and payments of $ 5000 and $ 9000 made by debtor wife as part of a plea agreement. The state asserted a complete defense based on contemporaneous exchange for new value.
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Court
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