Avoidance Of Foreclosure Sales As Preferential Transfers: Another Serious Threat To Secured Creditors?

Examines whether noncollusive foreclosure sales should be avoidable as preferential transfers under section 547(b) of the Bankruptcy Code. Part II describes the foreclosure sale process, the status and impact of the Durrett Rule, and the elements of section 547(b) of the Bankruptcy Code. Part III then describes the current state of the law on the avoidance of foreclosure sales as preferential transfers. Part IV presents the reasons for and against subjecting foreclosure sales to avoidance as preferential transfers. Finally, Part V concludes that foreclosure sales should, in some cases, be avoidable as preferential transfers.