On November 29, 2011, AMR Corporation, the parent company of American Airlines and American Eagle, and certain of its U.S. affiliates, including American Airlines and American Eagle, filed voluntary petitions for chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.

Although the number of commercial bankruptcy filings has dropped, the number of lawsuits arising out of these bankruptcies is on the rise.  These lawsuits are called “avoidance actions” because they seek to avoid or “unwind” transfers to third parties.  The most common avoidance actions are “preference” actions, filed against unsecured trade creditors to recover alleged “preferential payments” made by the debtor.

Chrysler Proposes Joint Plan of Liquidation; Unsecured Creditors' Distribution Contingent Upon the Outcome of the Daimler Lawsuit