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This article was originally published in the November/December 2009 issue of The Secured Lender.  To view the full article, click here.

In the case of Schubert v. Lucent Technologies, Inc., the Court of Appeals for the Third Circuit examined what factors would transform a creditor into a non-statutory insider, subject to the one-year bankruptcy preference period (11 U.S.C. §547) for insiders, rather than the shorter 90-day preference period for creditors.  The Court also examined the "earmarking doctrine" as a defense to a preference action and grounds for equitable subordination of a creditor's claim.