Trade creditors defending preference claims recently got some good news from the United States District Court for the District of Delaware. In Center City Healthcare, LLC v. Medline Industries, Inc., the District Court affirmed the Bankruptcy Court’s grant of summary judgment in favor of the creditor defendant, Medline, and gave some important support for the “objective,” industry-based ordinary course of business (OCB) defense in the process.

The opinion is particularly significant because the District Court squarely endorsed Medline’s use of Risk Management Association (RMA) data as reliable, admissible evidence for proving industry‑standard payment practices and made clear that a straightforward “days‑to‑pay” analysis based on industry data, by itself, is sufficient to satisfy the objective OCB defense. The decision also upheld the Bankruptcy Court’s ruling that collection pressure does not automatically negate an industry‑based OCB defense. For trade creditors that routinely find themselves on the receiving end of preference demand letters and complaints, the Center City opinion reinforces multiple aspects of the preference defense toolkit.

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