Investors and business owners who have received a payment on account within 90 days before a borrower files a bankruptcy case may have received a "preferential payment." The payments are "preferential" because they allow one creditor to receive more than a similarly situated creditor. A bankruptcy trustee may demand that such payments be returned, and if they are not returned, the trustee may file an adversary proceeding (a lawsuit) to force repayment. A good defense can force the trustee to settle for less, or take nothing all.
A bankruptcy trustee can also recover fraudulent conveyances. A fraudulent conveyance is a transfer by an insolvent debtor of a valuable asset for less than it is worth. Examples of a fraudulent conveyance include an unfair property division in a divorce, the purchase and sale of a house in a distress sale, or on a leveraged buyout of a business where the purchase price is financed using the assets acquired in the transaction.
Relief from the automatic stay
Lenders and landlords may receive relief from the automatic stay by filing a motion in the bankruptcy court to allow them to foreclose their lien or repossess their property.
Creditors with claims that were incurred by fraud, embezzlement, or willful and malicious injury, may ask the bankruptcy court to except their claim from discharge.