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Recoupment: Apples, Oranges And Fruit Basket Turnover, David G. Epstein

Law Faculty Publications

fiscal years and deducted the overpayment from its payments to H during that year. The fiscal year 2000 was also the year that H filed for Chapter 11. H filed an adversary proceeding against US contending that the deductions within four months before H's bankruptcy filing were voidable preferential transfers and that US's deductions after the bankruptcy filing were in violation of the automatic stay. The bankruptcy judge, the district court judge, and a unanimous appellate court panel looked to the law of recoupment to hold that US's reduction of payments was neither a preferential transfer nor a violation of …