Rethinking Preferences

Abstract

Dating back to the Bankruptcy Act of 1898, it was acknowledged that Congress has always, in the history of bankruptcy legislation, "carefully endeavored to preserve a distinction between what may be termed guilty and innocent preferences." This article argues that many of the currently protected good preferences, however, should be made subject to avoidance and recapture, specifically advocating for the repeal of the ordinary course of business exception in section 547(c)(2) of the Bankruptcy Code.