Trainor Unsecured Creditors Committee Files Preferential Payment Claims Against Industry Companies

The Committee of Unsecured Creditors appointed in the bankruptcy case of Trainor Glass has filed a number of preferential payment claims to obtain funds paid to a number of industry companies and others in the 90 days before Trainor filed for Chapter 11 last March.

Among the companies against whom the committee has filed claims and the amounts allegedly paid during the period are:

• Architectural Testing Inc. ($15,500);
• Assa Abloy (dba Besam Inc.) ($14,396.36);
• Advanced Door Interests ($117,560.60);
• All Metals Fabrication Inc. ($20,524.73);
• Applied Research Associates ($34,627.22);
• Architectural Metal Fabricator Inc. ($20,000);
• Brothers Glass and Glazing LLC ($23,792.40);
• Building Envelope Solutions LLC ($477,151.33);
• C.R. Laurence Co. Inc. ($171,170.80);
• Coyote Glass LLC ($66,977.12);
• Dorma Glass Inc. ($18,705.37);
• Efco Corp. ($718,583.71);
• Façade Concepts Inc. ($76,097.81);
• Firestone Building Products ($114,012.10);
• Hallmark Fabricators ($62,189.03);
• J.E. Berkowitz LP ($303,151.01);
• Kawneer Co. Inc. ($147,448.89);
• Klein USA ($63,886.53);
• Keymark Corp. ($351,815.80);
• Mammen Glass and Mirror Inc. ($67,469.94);
• Mapes Industry Inc. ($16,736);
• McGrory Glass Inc. ($75,740.73);
• Mestek Inc. ($18,533.10);
• Midwest Wholesale Hardware Co. ($51,795.74);
• Safti First ($53,906.73);
• Pittco Architectural Metals ($24,723.06);
• Security Lock Distributors Inc. ($35,069.96);
• Supersky Products Inc. ($27,112.50);
• The William L. Bonnell Co. Inc. ($182,690.86);
• Trulite Glass & Aluminum Solutions ($503,266.43);
• Tremco Inc. ($69,250.17);
• Viracon Inc. ($1,155,077.94);
• W & W Glass LLC ($481,924);
• YKK AP America Inc. ($152,571.72); and
• Blue Sky Glass Design ($29,500.95).

“During the 90-day period preceding the petition date, between December 10, 2011 and March 9, 2012 (the “preference period”), [Trainor] continued to operate its business affairs, including the transfer of property, either by checks, cashier checks, wire transfers, direct deposit, or otherwise to certain entities …” writes the Committee.

According to the numerous complaints, each of these companies were considered debtors to Trainor during this time period and “each preferential transfer constituted a transfer of interest of the debtor in property.”

“Each preferential transfer was made to or for the benefit of the defendant, within the meaning of § 547(b)(1) of the Bankruptcy Code, because each preferential transfer either reduced or fully satisfied a debt then owed by the debtor to the defendant,” continues the committee. “Each preferential transfer was made for or on account of an antecedent debt owed by the debtor to the defendant before such transfer was made. The debtor was insolvent throughout the preference period because the sum of its representative debts was greater than the fair value of its respective assets.”

Further, the committee alleges that “each preferential transfer enabled the defendant to receive more than the defendant would have if the [Trainor’s] case was brought under chapter 7 of the Bankruptcy Code; the preferential transfers had not been made; and the defendant had received payment of such debt to the extent provided by the Bankruptcy Code.”

The committee also claims that it is “entitled to judgment against [each] defendant disallowing all claims of the defendant unless and until the defendant returns all amounts due to [Trainor’s] bankruptcy estate in this case … ”

This is not the first time industry companies have been subject to requests for refunds of preferential payments. A similar situation arose two years ago in the bankruptcy case of Arch Aluminum.