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In Reinhardt v. Prince (In re Reinhardt), 177 F.4th 684 (6th Cir. 2026), the U.S. Court of Appeals for the Sixth Circuit held that a property tax foreclosure constituted an avoidable preferential transfer under Section 547(b) of the Bankruptcy Code.
Although the decision arose from Michigan's property tax foreclosure scheme, its reasoning has broader significance for preference litigation, particularly on transfer timing and Section 547(b)'s "more than" test, which asks whether the challenged transfer allowed the creditor to receive more than it would have received in a hypothetical Chapter 7 liquidation.
In this Westlaw Today article, Loeb Restructuring & Bankruptcy partners Bethany Simmons and Noah Weingarten discuss this recent Sixth Circuit ruling, noting that, despite arising from Michigan’s tax foreclosure regime, the decision has broader implications for preference litigation, particularly with respect to transfer timing, the scope of Section 547(b)(5)’s “more than” requirement and the role of state-law rights in evaluating a creditor’s recovery.
To read the full article, please visit Westlaw Today’s website.
Although the decision arose from Michigan's property tax foreclosure scheme, its reasoning has broader significance for preference litigation, particularly on transfer timing and Section 547(b)'s "more than" test, which asks whether the challenged transfer allowed the creditor to receive more than it would have received in a hypothetical Chapter 7 liquidation.
In this Westlaw Today article, Loeb Restructuring & Bankruptcy partners Bethany Simmons and Noah Weingarten discuss this recent Sixth Circuit ruling, noting that, despite arising from Michigan’s tax foreclosure regime, the decision has broader implications for preference litigation, particularly with respect to transfer timing, the scope of Section 547(b)(5)’s “more than” requirement and the role of state-law rights in evaluating a creditor’s recovery.
To read the full article, please visit Westlaw Today’s website.
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