Bankruptcy Litigation With more than 50 contested hearings and trials in bankruptcy courts throughout the United States, the firm advises clients on the law and counsels them on the practicalities of the situation. The hearings and trials have involved nondischargeability, denial of discharge, fraudulent transfers, preference litigation, setoff rights, and representation of purchasers. The firm has represented creditors, debtors and trustees. The following is a synopsis of his experience in these matters: Preferences Mr. Kerkman brought more than 30 preference actions on behalf of bankruptcy trustees. He has also represented creditors in such actions. He understands the ordinary course of business and new value defenses, having litigated these issues from both sides. There are practical issues in addition to the legal ones. The amount in dispute often does not justify the cost to litigate the issue in court. Additionally, creditors who have been fleeced once when the debtor filed bankruptcy are subject to additional injustice in their eyes when they are being asked to repay what they have legally obtained. Nondischargeability Actions These actions are usually based upon fraud. The firm has litigated many cases involve debts incurred in reliance of a financial position which was fraudulently represented as well as cases based upon actual fraud. In one case, Mr. Kerkman represented two creditors who invested in jewelry. The jeweler gave the creditors financial statements, which were "draft" compilations. Bank records were obtained to reconstruct the jeweler's financial position. The court found that the debts had been incurred through the fraudulent use of financial statements and based upon actual fraud. It held the debts were not dischargeable. The creditors then sued the accounting firm which had prepared the compiled financial statements and obtained a favorable settlement. Fraudulent Transfers The ability to determine what really happened in the transaction is crucial to being successful. It is a matter of substance over form. Solvency may or may not be an issue. The firm's keen financial acumen allows it to determine the substance over form, obtain favorable settlements and successfully litigate cases. Frequently there is an effort to disguise the real transfer. The analysis begins with the parties' positions before any transfers and their respective positions after the transfers. What happened in between is then analyzed to determine the appropriate attack. Denial of Discharge Creditors usually bring actions to deny the dischargeability of their debts instead of obtaining a denial of a discharge because frequently the debtor has a limited availability of funds. If the discharge is denied, then all creditors, including the client can seek the debtor's assets. Sometimes such an action is necessary if there are no other means to avoid the discharge or if the creditor holds the only significant debt. Members of the firm have litigated both sides of the issue, although he usually represents creditors. Appointment of Trustees Fraud and gross mismanagment provide the basis to appoint a chapter 11 trustee. Mr. Kerkman has brought and defended such motions. In particular, he successfully brought a motion in Arizona after expedited discovery and obtained a chapter 11 trustee for a NASDAQ company within two months after the case was filed. Other Disputes: Objecting to Sales, Claims, etc. The P.A. Bergner & Co. chapter 11 case was a $1.2 billion department store case in which approximately 5,000 objections were filed. Mr. Kerkman was responsible for reviewing the 12,000 claims and resolving all objections to claims. He spend two years litigating and resolving objections to all types of claims. Sale of assets is the other major area of litigation. Frequently these sales are on an emergency basis. Often, notice is limited. Consequently, the details of the sale are frequently worked out on the court house steps after some arm twisting by the judge. Mr. Kerkman frequently and successfully represents the purchasers. | 
