Dore Law - August 2021

Dore Law - August 2021

THE D or É R eport

D ore L aw . com

AUGUST 2021

YOU’RE OUT OF THE WOODS … RIGHT?

DON’T FORGET ABOUT THOSE NASTY PREFERENCE CLAIMS

The energy industry has suffered a record number of bankruptcies over the past year and a half. But this latest wave of bad news seems to be ending thanks to rising product prices resulting from the recovering worldwide economy. Unfortunately, there is one piece of bad news on the coattails of the oil and gas slump. You have to make that dreaded call to your CFO and tell him you might have to return some money to the estate of that bankrupt customer.

from the creditors. For them, it is all a game of negotiation using maximum legal leverage.

HOW DO YOU DEFEND AGAINST PREFERENCE CLAIMS?

First, it’s a narrow area of the law in which not many law firms have experience or expertise. The law firms suing your company are experts. So, you need your own legal experts with experience in preference claim litigation. Doré Rothberg McKay is one of a small number of law firms that concentrates on representing trade creditors. Our lawyers are constantly in the bankruptcy courts, and we have experience successfully defending preference claims. There are a number of legal defenses to the claim that your company was somehow preferred over other creditors when the customer paid you what was owed. We have developed strategies using statistical analysis to legally prove the payments were “made in the ordinary course of business,” recognizing the term can be defined more than one way. This is the most common defense, but there are others. Our legal team may be able to show that your company would have been entitled to the money as a secured creditor, for example, because it would have filed a lien but for receiving its payments. The key to a successful settlement of a preference claim is to turn the table using a well-supported legal defense that fits the circumstances of your collections. The trustee and the law firm suing your company are often satisfied with a relatively small payment if their alternative is a costly lawsuit with a good chance that they recover nothing. Remember — they don’t get paid for all their work unless they win and get you to pay the money back. Make certain you are represented by lawyers who know what they are doing when your company is defending a preference claim. Our firm has saved clients millions of dollars by working smart instead of surrendering.

WHAT IS A PREFERENCE CLAIM?

Long after you have collected your money and your customer is out of bankruptcy, your company may well find itself defending a lawsuit to repay a part of your collections. “Preference claim” is the bankruptcy code name for this seemingly unfair assault, which can add insult to your injury. Such claims are based on the idea that your company was “preferred” over other creditors. These preference claims are not limited to the energy industry and invade all trades and industry sectors. The statute of limitations is two years for the trustee (or more likely the law firm representing the trustee) to file a lawsuit demanding you repay the monies your company collected before the bankruptcy was even filed. Most preference claim lawsuits begin just before that two- year deadline after the customer has filed bankruptcy. That means that even though many bankruptcies are in the rearview mirror, preference claim lawsuits against your company could just be starting. All the monies you manage to collect in the 90 days before a customer files bankruptcy are “presumed” to legally belong to the trustee as part of the bankruptcy estate. In theory, the trustee will put all these monies together and redistribute them in legal priority to all the creditors. In actual practice, little of these monies find their way back to creditors, since most are used to pay the costs of the bankruptcy. It makes no difference that your company was legitimately owed the money you collected before the bankruptcy or that your company was helping the customer stay in business by working with it even when it was having financial problems.

-Carl Doré Jr.

One dirty little secret is that typically, the trustee and the law firm suing you get paid a percentage of all the monies they extract

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IS YOUR HOME OFFICE MISSING SOMETHING?

Everyone loves back-to-school season because of the shopping spree! Students can get tools they’ll actually use for the entire year while they’re on sale while saving a few extra dollars in the process. But you can get that very same feeling as an entrepreneur, too. Here's how you can make the most of back-to-school deals this year for your home office.

UPGRADE YOUR HOME OFFICE’S AMENITIES.

AppleCare+ service, which gives you two incidents of accidental damage protection every 12 months. Dropped your laptop or spilled coffee on it? They’ll fix it, no questions asked. INVEST IN THE NEW OFFICE CHAIR YOU’VE BEEN WANTING. Don’t sacrifice your posture just because you’re working from home. Whether remote working has turned into a permanent or a part-time solution for your job, you deserve an office chair that can help keep your back straight, preventing pain and slouching. Many big-box stores will be offering sales on office chairs, so take the opportunity to sit in a healthier way today — before the expensive holiday season rolls around! Just because you’re an adult doesn’t mean you can’t have the joy of back-to-school shopping too. We hope you treat yourself to something that’ll make your remote routine even better.

Are you a seltzer water fan? Every year, Amazon almost always has an “Off to College” sale, featuring various products that make dorm life a little bit easier and more convenient. If you want to do the same for your home office, look into a tabletop fridge — or an electric tea kettle, if tea is more your style. Some affordable decor, like wall art or small potted succulents, can spruce up your office without making a mess. If you’re looking to organize your space, consider buying desktop shelves to free up clutter. Then, you won’t have to leave your desk to stay in the zone!

LOOK OUT FOR APPLE AND PC SALES!

Replacing your current technology can be expensive, but back-to- school sales are the perfect way to spare your wallet. Have an amazing computer already? You can still benefit majorly from staying tuned! During last year’s back-to-school sale, Apple offered 20% off their

OUR LAWYERS ARE SUPER!

DORÉ, ROTHBERG, AND MCKAY CLEAN UP SUPER LAWYERS’ LI STING

Once again, the listing of Super Lawyers included our leadership team. For the 2021–2022 year, our super lawyers include:

Carl Doré Managing Shareholder

Lisa Rothberg Director, Liens, and Transactions

Zachary McKay Director, Litigation, and Bankruptcy

Another shareholder, Brent Doré , has been selected as president-elect for the Texas Aggie Bar Association (TABA) for the current year. He will assume the duties of president of TABA next year.

Christina Heeth , a lawyer in our liens and transaction section, was recognized in “Who’s Who Women in Law” for 2021–2022. She also co-manages our firm’s program for legal interns who are from Texas law schools.

Tom Whiteside , Of Counsel and director of business development, has been elected president of the Katy Bar Association. He will occupy the position held a few years ago by Carl Doré, one of the first members of the association. We’re proud to have such super lawyers on our team!

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We’re back! It’s about time we get together again. TRENDS & TRAPS 2021: A COLLECTIONS & CREDIT SYMPOSIUM FOR THE ENERGY SERVICES & EQUIPMENT INDUSTRY

Thursday, Oct. 14, 2021 Hilton Embassy Suites Hotel Houston Energy Corridor

Co-Sponsored by Doré Rothberg McKay DoreLaw.com

WORD SEARCH

SUMMER VEGETABLE GREEK SALAD

Inspired by CookieAndKate.com

INGREDIENTS For the vinaigrette: •

1 cup yellow bell pepper, chopped 1/4 cup red onion, finely chopped 1/4 cup fresh parsley, chopped 1/4 cup Kalamata olives, pitted and halved

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2 tbsp red wine vinegar 1 tsp Dijon mustard 1 garlic clove, minced

• • • • • •

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1 tsp dried oregano

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1/2 tsp honey

1/2 tsp salt

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1/4 cup extra-virgin olive oil

1/2 cup feta cheese, crumbled Optional protein choices: 1 cup cooked chickpeas or 6 oz Genoa salami

• •

For the salad: •

1 head romaine lettuce, chopped

1 cup grape tomatoes, halved 1 small cucumber, seeded and chopped

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DIRECTIONS 1. In a medium bowl, whisk together vinegar, mustard, garlic, oregano, honey, and salt. Slowly drizzle in the olive oil, whisking until well combined. 2. In a large serving bowl, toss together the romaine lettuce, tomatoes, cucumber, bell pepper, red onion, parsley, olives, and feta (as well as the chickpeas or salami, if desired). 3. If you plan to serve all the salad at once, drizzle the dressing over the salad to lightly coat, then toss to combine. Otherwise, store the vinaigrette and salad separately, then dress each portion before serving.

BEACH FISHING FRIENDSHIP GARDEN

HEAT OUTDOORS POOL RAINY

RHUBARB SARDONYX SCHOOLING VACATION

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17171 PARK ROW, SUITE 160 HOUSTON, TEXAS 77084 281.829.1555 • DORELAW.COM INSIDE

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The Hidden Problem of Preference Claims

Go Back-to-School Shopping for Your Home Office!

Team Members Make Super Lawyers’ Listings

Trends & Traps 2021

Summer Vegetable Greek Salad

Why Does the 'quip' Toothbrush Really Work?

WHY DOES THE 'QUIP' TOOTHBRUSH REALLY WORK?

Have you seen a toothbrush that’s always showing up in Facebook ads? If you don’t have one already, it might surprise you that quip, the company that invented it, currently has a net worth of over $1.14 billion. How did they get there? Unlike most consumer product companies, quip didn't start with a product first. They focused on a problem first: People weren’t brushing, changing brush heads, or flossing nearly enough. Using those shortcomings as a starting point, they began to revolutionize the dental product industry. Inventing a New Design After seeing the sleek, modern design of a quip toothbrush, it won’t surprise you that two industrial designers invented it. Co-founder and CEO Simon Enever got the idea for quip toothbrushes in 2012 after a visit to the dentist in Queens, New York. His dentist mentioned that, despite electric toothbrushes working so well, people still didn’t use them enough.

That day, Enever called Bill May — who’d worked for Lifetime Brands like Farberware and KitchenAid — and they started working on the company and product idea. But how do you break into a market dominated by two corporate brands? Existing electric toothbrushes worked great. But Enever, like most Americans, just couldn’t find one he wanted to use. The toothbrushes were heavy, the charging stands were clumsy, and the brush itself often felt too big, too small, or too oddly shaped. From there, Enever and May stripped down many expensive, unnecessary features that toothbrushes had while keeping the most useful features, like a buzzing timer. That led to the signature, simplistic, and familiar quip toothbrush design we know today. Creating a Worldwide Trend With a competitive, affordable price ($25) and subscription service, quip makes it easy

for users to stay on top of their oral health. Quip also works directly with dentists, who offer patients free quip subscriptions if they come in for six-month checkups. With quip’s sleek, light, and convenient design, and even a Bluetooth app for tracking and rewarding customers with healthy brushing habits, it’s no wonder quip toothbrushes are a worldwide success. Enever and May’s innovation wasn’t really in the toothbrush itself, but the way they envisioned how a toothbrush can encourage people to keep brushing. We think it’s safe to assume that many other dental brands, even other health-focused brands, will take inspiration from this approach.

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