Chapter 11 Bankruptcy can be a valuable tool for businesses that need to restructure their operations or create new debt repayment schedules. However, the life of a business owner can take on new complications after he or she files the initial petition for bankruptcy. While Chapter 11 is typically used to address debts that existed prior to filing, the bankruptcy trustee can investigate certain transactions that were made within a certain timeframe of the filing.

If the bankruptcy trustee determines that a transaction within a certain timeframe was made for an improper purpose, then the trustee can use the powers vested in them by the bankruptcy court to retroactively cancel, or avoid, that transaction. This will require the bankruptcy trustee to file motions with the bankruptcy court that bring in third parties to the bankruptcy proceedings, and these third parties will typically hire attorneys to avoid returning the money that was transferred to them. In other words, this power to cancel transactions can cause significant delays and complications in a bankruptcy proceeding.

In this course, we explore the extent of a trustee’s ability to avoid—often affectionately referred to as clawback—a bankruptcy petitioner’s past transactions. This involves an analysis of the timeframes involved, the parties involved, and the amounts of money involved. Finally, we conclude by providing an overview of possible defenses a bankruptcy petitioner can use to prevent the trustee from implementing his or her clawback powers.

Learning Objectives
  • Explore the purpose of Chapter 11 bankruptcy and the procedures to follow for a successful petition.
  • Discover a bankruptcy trustee’s power to avoid past transfers to creditors and the circumstances under which that power may arise.
  • Identify the various defenses a bankruptcy petitioner can assert to prevent the bankruptcy trustee from using his or her power of avoidance.
Last updated/reviewed: August 21, 2023
4 Reviews (16 ratings)


Member's Profile
The content of this course was very good and had good examples. The only improvement I would suggest is that the speaker talk a little slower, especially when covering information that is not on the slides.

Anonymous Author
This was a good overview of CH11 bankruptcy. It also provides some valuable information that will provide both debtors and creditors to consider before filing or if a customer files for CH11.

Anonymous Author
This was a good basic overview that provides general concepts needed to understand Chapter 11.

Member's Profile
Good overview of bankruptcy and the clawback provisions.

Course Complexity: Advanced

No advanced preparation or prerequisites are needed for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Introduction to Chapter 11 Bankruptcy: Clawback Provisions and Defenses00:40
  Overview, Requirements for Confirmation and Chapter 11 Trustee13:43
  Avoidance of Transfers and Essential Terms for Avoidance11:15
  Contemporaneous Exchange, OCOB, Security Interest in Inventory, Statutory Liens and Debt Payments14:30
  Chapter 11 Bankruptcy: Clawback Provisions and Defenses 40:25
  Slides: Chapter 11 Bankruptcy: Clawback Provisions and DefensesPDF
  Chapter 11 Bankruptcy: Clawback Provisions and Defenses Glossary/IndexPDF