Question

Damian owns a pick-up truck and a motorcycle. He sells the motorcycle to Eden for $10,000. Eden pays for the cycle with a check, knowing that she had insufficient funds in her account to cover the amount. A week later, Damian files a petition in bankruptcy for relief through a liquidation.

a. ​not cancel it, but can sue Eden to recover the price.
b. ​cancel it as a fraudulent transfer.
c. ​cancel it as a voidable preference.
d. ​not cancel it or sue to recover the price because it occurred before Damian filed his petition in bankruptcy.

Answer 1

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