ALLONHILL, LLC V. STEWART LENDER SERVICES, INC.
- Case Type:
- Business
- Case Status:
- Reversed and Remanded
- Citation:
- 25-1810 (3rd Circuit, Mar 02,2026) Not Published
- Tag(s):
-
- Ruling:
- The Bankruptcy Court did not err in using the $2.05 million settlement amount to value the claim. Because the Aurora Claim was only $2.05 million, Allonhill was solvent on the transfer dates. Consequently, the Preference Claim under 11 U.S.C. § 547(b) fails.
- Procedural context:
- On Appeal from the United States District Court for the District of Delaware, which affirmed in part and remanded in part the decision from the Bankruptcy Court which denied Allonhill’s Preference Claim finding that the debtor was not insolvent on the date of the transfers at issue.
The District Court concluded that Allonhill was insolvent on the ransfer Dates because the Aurora Claim should be valued “contemporaneously” based on the Initial Aurora Judgment of $25.9 million.
- Facts:
- Allonhill was hired by Aurora Bank, FSB, under a contract that included a $2 million liability cap for claims arising from their agreement.
Aurora sued Allonhill for fraud and breach of contract. During a bench trial in 2013, SLS purchased most of Allonhill's assets. Between January and February 2014, Allonhill transferred $6.6 million to SLS. Shortly after the transfers, a trial court ordered Allonhill to pay $25.9 million. At issue before the bankruptcy court was whether the Aurora Claim should be valued at the $25.9 million figure (rendering Allonhill insolvent) or the $2.05 million settlement figure (rendering Allonhill solvent) for purposes of a preference action.
- Judge(s):
- SHWARTZ, BIBAS, and PHIPPS
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