Letters of Credit and the Powerine Preference Trap

The Business Lawyer, Vol. 53, 1997

36 Pages Posted: 6 Jan 2012

Date Written: November 5, 1997

Abstract

This article examines the preference issues that can confront a creditor that held a standby letter of credit to secure a debtor's obligations where the debtor performed its obligations in the 90-day preference period prior to bankruptcy. The article discusses the decision in In re Powerine, 59 F.3d 969 (9th Cir. 1995), and offers ways in which the creditor may attempt to avoid the preference trap highlighted in Powerine.

Suggested Citation

Baxter, Michael, Letters of Credit and the Powerine Preference Trap (November 5, 1997). The Business Lawyer, Vol. 53, 1997, Available at SSRN: https://ssrn.com/abstract=1980201

Michael Baxter (Contact Author)

Covington & Burling LLP ( email )

One CityCenter
850 Tenth Street, NW
Washington, DC 20001-4956
United States

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