Forest Products Co. Faces $1.4m Alleged Preference Clawback Buzz Saw
Download the full pdf of the complaint by clicking: here
June 24, 2022, US Bankruptcy Court Eastern District of Washington – John D. Munding, as the Chapter 7 trustee (“Trustee”) of the bankruptcy estate of Ponderay Newsprint Company (“Debtor”) sues Lake Superior Forest Products, Inc. (“Defendant”) to avoid and recover $1,423,969.41 as alleged “preferential transfers”.
The Trustee in his complaint alleges that the Defendant held a 40% ownership in Ponderay Newsprint Company and is allegedly an “insider” of Ponderay Newsprint Company. The allegations include that Debtor Ponderay made certain payments to the Defendant for alleged management service fees, sales commissions, and transition services fees during the 365-day period prior to the filing of bankruptcy petition.
The Trustee has allegedly conducted his own due diligence into Ponderay’s business and financial operations and claims that he has not been able to identify any potential “ordinary course” or “new value defense” that may be available to the Defendant.
The Trustee alleges that the transfers of money by the Debtor, Ponderay Newsprint Company to the Defendant were made while the Debtor was insolvent. Trustee Munding requests the Court to avoid and recover these transfers with interest and costs of suit.
John D Munding v. Lake Superior Forest Products Inc. (In re Ponderay Newsprint Company), AP No. 22-80014, US Bankruptcy Court for the Eastern District of Washington.