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The trustee overseeing the Worley & Obetz bankruptcy is eyeing 18 of its suppliers who might have gotten incorrectly paid in full, outside the bankruptcy process.

Christine Shubert is asking the U.S. Bankruptcy Court for permission to hire Karalis PC of Philadelphia, a specialist in that niche of bankruptcy law, to find and recoup any payments that fell outside the bankruptcy code’s rules.

If Karalis PC is hired and succeeds at recovering any of the payments, those dollars would go into the pool of funds to be paid to the Manheim energy company’s creditors at some future date.

In her June 20 filing, Shubert names the firms whose payments she wants reviewed, but not the amount of the payments she’s questioning or why those payments have been identified for review.

The filing only states that she wants Karalis PC to look for “preferential, fraudulent and/or post-petition transfers.”

But Shubert accuses none of the 18 companies of any wrongdoing or errors, nor does she accuse Worley & Obetz.

An attorney for Shubert did not immediately respond to questions posed by LNP.

If the court lets Karalis PC get hired, key factors in its research would be determining when the payments were made and why.

Under the bankruptcy code, payments made as early as 90 days before Worley & Obetz filed for bankruptcy on June 6, 2018, can be voided and recovered as so-called “preference payments.”

That’s because those recipients most likely received a greater percentage of what they were owed than would creditors who file claims for payment via the bankruptcy process.

(The preference-payment period is one year prior to the bankruptcy if the payment went to an insider of the bankrupt company — such as a company employee or his relative, friend or business associate.)

The trustee also can void and recover a bankrupt company’s payments that were made after the bankruptcy began, if the recipient didn’t follow the process and file a claim.

Again, the reason is to be fair to creditors who follow the rules.

Another type of payment that a trustee can challenge is a fraudulent transfer. This occurs when a bankrupt company secretly moves money to hide it from the bankruptcy process and creditors.

In that case, the trustee can review payments as old as four years before the bankruptcy filing happened.

The trustee also can review payments made by a company when it’s insolvent, no matter how long before the bankruptcy filing that insolvency occurred.

Shubert lists as “potential defendants” the following companies:

Abarta Coca-Cola Beverages, Biosphere Fuels, CCIU, Chase Card Services, Columbia Gas Transmission, Comcast Business, DPSG of Eastern P.A., Eby-Brown Candy, Jackson Lewis, Kreider Dairy Farms, Musket Corp., Paul Davis Restoration, Prudential, R.E. Michel Co., Shipley Fuels Marketing, Squire Patton Boggs, Triangle Refrigeration and Winfield Solutions.

Karalis PC’s fees range from $130 per hour for a paralegal’s work to $530 per hour for founder Aris Karalis’ work.

Worley & Obetz closed abruptly in June 2018, the victim of a $2 billion bank fraud allegedly led by its former CEO. All of its 250 employees lost their jobs.

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