Legal
Updated Information Regarding Preference Suits (March 1, 2007)
We understand that the law firm Drinker, Biddle & Reath, LLP, as representatives for Edward P. Bond, the creditor trustee (the “Trustee”) for the Creditors Liquidation Trust (the “Creditors Trust”) has filed over 300 lawsuits in an attempt to recover alleged preferential transfers made within ninety (90) days of the bankruptcy petition filed by Maxide Acquisition Inc. Please understand we have no connection to or relationship with this Creditors Trust, Mr. Bond, Drinker, Biddle & Reath, or these preference suits.
It is very important for you to retain your own legal counsel to advise you on these matters. If you do not have an attorney, we are happy to recommend one. The information on this website is provided solely for information purposes and is not and should not be considered legal advice. Neither DMX nor its attorneys are representing you and no client-attorney relationship exists as a result of the information provided here.
In general, with regard to preference actions, you may have at least two defenses available to you: the "ordinary course of business" defense and the "subsequent new value" defense (set forth in Section 547(c)(2) and (c)(4) of the Bankruptcy Code, respectively. Both defenses require professional legal advice because they are complicated and require complex analysis. We are available to work with your attorney to provide what information we can that may be helpful. One way we might be able to assist you and your attorney is by providing our business records that show payments made to you by DMX for services rendered both prior to and during the preference period. Your attorney can use these records to support any defense you may have.
In addition, we are providing you with the names of the other vendors who have been sued by the Creditor’s Trustee (see link). It is possible that you could find another vendor who is interested in sharing some legal expenses. For instance, we anticipate that expert testimony may be required and it possible to share expenses by sharing the same expert. If you are interested in sharing legal expenses, you may wish to contact one of the vendors listed, or we can connect you with another vendor who is also interested in sharing expenses.
We are sympathetic to your situation and appreciate the cost and inconvenience these preference suits may cause you. Please feel free to contact Susan Pruett at 512-380-8514 or susan.pruett@dmx.com with any questions you may have.
List of Maxide Chapter 11 Unsecured Creditors
DMX, Inc. Response to Demand Letter:
If you found your way to this website, it means you have seen our correspondence concerning the Demand Letter from the law firm Drinker, Biddle and Reath, LLP, as representatives for Edward P. Bond, that you may have received.
We understand and sympathize that the Demand Letter may have opened old wounds from the February, 2005 Maxide bankruptcy cases. Since the Maxide bankruptcy, we have tried to build new relationships and prove to you that we are good business partners with one of the strongest balance sheets in the business.
In the interest of furthering our business relationship, we have set up this website with information that you may find helpful. We strongly suggest that you immediately retain legal counsel to advise you with respect to the matters set forth in the Demand Letter.
If you continue to have any questions, please contact Susan Pruett at 512-380-8514 or susan.pruett@dmx.com.
Additional Detail Regarding the Demand Letter:
Pursuant to the Bankruptcy Court’s order that approved the sale of the assets to DMX, certain claims and causes of action against creditors were released. This included any claims and causes of action (including preference claims) against any party to an executory contract and/or unexpired lease that is listed on the table that immediately follows, provided that the payments in question relate to such contract or lease.
Accordingly, if you are listed on this table, any payments made to you under the listed executory contract or unexpired lease with the Debtors are not recoverable by the Trustee. We have contacted the Trustee’s counsel and have requested that they immediately take action to withdraw the Demand Letters as to the persons or entities who received payments that fall within the criteria described in this paragraph. They have assured us that they will so act.
In the event that you received a Demand Letter that requests the return of payments that do not relate to contracts or leases listed on this table or in the event the Trustee does not withdraw its Demand Letter to you, we strongly suggest that you immediately retain legal counsel of your choice to advise you with respect to the matters set forth in the Demand Letter. It is our understanding from our legal counsel that in certain situations, defenses may exist to the claims asserted, including the defense that the payments were made: (a) in the ordinary course of business or financial affairs of the Debtors and you; and (b) in accordance with ordinary business terms.
Your legal counsel can advise you on these defenses and your rights with respect to the matters set forth in the Demand Letters.
Thank you again for your understanding.
