Question

On November 5, Hawes, Inc., a small subcontractor opened an account with Basic Corp., a supplier of construction materials. Hawes promised to pay its bills within 30 days of purchase. Although Hawes purchased a substantial quantity of goods on credit from Basic, it made few payments on the accounts until the following March, when it paid Basic over $21,000. On may 14, Hawes filed a voluntary petition under Chapter 7. Why did Hawes pay Basic in March? Does the bankruptcy trustee have a right to recover this payment? Is it fair to Hawes's other creditors if "Basic is allowed to keep the $21,000 payment?

Answer 1

A bankruptcy trustee is obligated to handle the bankrupting party's assets also share them. Under the existing circumstances, $21000 is not one piece of Hawes' assets because it was settled following to Basic Corp. Hawes held responsible to Basic Corp. for amounts and was needed to return on them. The bankruptcy trustee cannot recollect a earlier funded mortgages.
Although Hawes' other buyers may not consider it is good, Basic Corp. earned the cash ere Part 7 did registered.