Is Severance Pay Prior To Bankruptcy A Fraudulent Transfer
I received a letter from a legal firm stating that under Sections 547 and 548 of the Bankruptcy Code that my severance pay, paid within 60 days of the company's bankruptcy filling, "may be" considered to be a fraudulent transfer. They want me to pay them back the severance money I was given. I think the lawyers have no grounds and are just looking to squeeze money from me, hoping I'll blindly pay. They also state in the letter that they will accept 80% of money I was given, which makes me think this is even more of a stupid request. Could someone provide some guidance for me on this?
Answer:
It is certainly possible that the payment was a fraudulent transfer. Nevertheless, depending on the amount at issue, this letter may be all that you receive; it may not be cost effective to sue you for its recovery. I *strongly* recommend that you and the other employees band together and retain a bankruptcy attorney to represent your joint rights in this matter.
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