In a recent decision by the influential Third Circuit Court of Appeals, In re KB Toys Inc., 2013 U.S. App. LEXIS 23083 at *17 (3d Cir. Nov. 15, 2013), the Court decided that “the cloud on the claim” stemming from a preferential payment made to the original claimant continues with the claim, which then could be disallowed.

Yesterday, Lehman Brothers Holdings Inc. (LBHI) and the Official Committee of Unsecured Creditors of LBHI (the Committee) filed a complaint against JPMorgan Chase Bank, N.A. (JPMorgan) in the U.S. Bankruptcy Court for the Southern District of New York.