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On November 5, Hayes, Inc., a small subcontractor, opened an account with Basic Corp., a carrier of construction materials. Hayes promised to pay its bills
On November 5, Hayes, Inc., a small subcontractor, opened an account with Basic Corp., a carrier of construction materials. Hayes promised to pay its bills within 30 days of purchase. Although Hayes purchased a substantial quantity of goods on credit from Basic, it made few payments on the account until the following March, when it paid Basic over $21,000. On March 14, Hayes filed a voluntary petition under Chapter 7.
Why did Hayes pay Basic in March? Does the bankruptcy trustee have a right to recover this payment? Is it fair to Hayes other creditors if Basic is allowed to keep the $21,000? It is fair to Hayes if Hayes is forced to return $21,000?
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