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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Hope they're processing refunds for summer camp.

https://www.adagioballet.com/announcing-2020-summer-camps-arlington/[/quote]

If they're going to file for bankruptcy, they can't issue those refunds now or they'll be subject to clawback in the bankruptcy proceeding.[/quote]
What is “subject to clawback”?[/quote]
DP. Bankruptcy law generally prevents businesses about to go bankrupt from making preferential payments prior to declaring bankruptcy. This is so that businesses can't send whatever money they have to certain parties, then declaring bankruptcy and there's nothing left for the other creditors. Payments that are made 90 days prior to the bankruptcy may have to come back and become part of the bankruptcy estate for the benefit of all the creditors.[/quote]

+1.  Payments made in the ordinary course of business (e.g., utility payments, paying routine vendor invoices) can be allowed, but any payments paid outside the normal course of business or that otherwise appear to be circumventing the priority of creditors.  Customers looking for refunds for services purchased by not received are basically at the bottom of the priority list, so if these business were to issue those refunds and then file for bankruptcy less than. 90 days later, all of those families would get letter from the creditors committee demanding they return those funds or face a lawsuit.  While a lawsuit against a single family wouldn’t be worth it, one filed against hundreds of families seeking a total of $100k+ may be worth filing because it will be cheaper for families to return those refunds than to hire an attorney.[/quote]

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