Quick Answer
If your company was sued by the Plan Administrator for F21 OpCo, LLC (Forever 21) in the U.S. Bankruptcy Court for the District of Delaware, the amount in the complaint is usually not what you will end up paying. Vendors, whether based in the U.S. or overseas, have defenses under 11 U.S.C. § 547(c) that often reduce these claims substantially. Your answer is generally due 30 days after the summons was issued, so speak with counsel before you respond or pay.
Why the Complaint Amount Is Only a Starting Point
The Plan Administrator, Steven Balasiano of MHR Advisory Group, LLC, began filing Forever 21 preference lawsuits on October 2, 2026, under lead Case No. 25-10469 (MFW). Each complaint attaches an Exhibit A listing the payments Forever 21 made to the vendor between December 16, 2024 and March 16, 2025, the 90 days before the Chapter 11 filing.
The demand is simply the total of those payments. It does not account for the vendor’s defenses, because the law places the burden of proving them on the vendor. That is why the opening number and the final number are often far apart.
The basic elements of a preference are rarely in dispute here. Forever 21 is presumed insolvent during the 90 days, and its disclosure statement projected that general unsecured creditors would recover well under 1%. These cases are decided on defenses and documents.
The Main Defenses to a Forever 21 Preference Claim
Subsequent new value, § 547(c)(4). Vendors who continued to ship goods or provide services to Forever 21 after receiving payment may be credited for that later value. This defense is often significant for apparel, accessories, logistics and service vendors who kept working with Forever 21 into early 2025. How it applies depends on ship dates, delivery dates and payment records, and is best analyzed by counsel.
Ordinary course of business, § 547(c)(2). Payments made on the same terms Forever 21 had always used with your company, or on normal terms for your industry, can be protected. Courts look at the history of the relationship, including timing, payment method and any collection pressure.
Contemporaneous exchange, § 547(c)(1). Payments made as a same-time exchange for new goods, such as prepayment, deposit or COD orders, may be excluded entirely.
Plaintiff’s due diligence, § 547(b). The plaintiff must perform reasonable due diligence and consider known defenses before filing suit. A complaint that ignores defenses you raised after the January 2026 demand letter can be challenged.
Payments that were not Forever 21’s property. Payments made by a third party, a factor, a letter of credit bank or a parent company may fall outside the preference statute.
In at least one Forever 21 complaint, the Plan Administrator itself acknowledged some potential new value, but only based on invoice dates. A vendor’s own records often tell a fuller story.
What Foreign Vendors Need to Know
A large share of Forever 21’s suppliers are overseas, and the Plan Administrator is suing them. About 50 of the 134 Forever 21 adversary proceedings filed so far name companies that appear to be based outside the U.S., including garment makers in mainland China, Hong Kong trading companies, and suppliers elsewhere in Asia and the Middle East.
- Being overseas does not stop a judgment. If a foreign vendor does not respond, the Plan Administrator can seek a default judgment for the full amount, plus interest and costs. That judgment can be enforced against U.S. receivables, U.S. bank accounts and future U.S. bankruptcy distributions.
- The same defenses apply. Foreign vendors can raise new value, ordinary course and contemporaneous exchange defenses just like U.S. vendors. Shipping terms, letters of credit and deposit arrangements common in overseas sourcing can be important evidence.
- Agents and trading companies may have extra arguments. A Hong Kong trading company or buying agent that only passed money on to a factory may argue it was a mere conduit rather than the party that actually received the transfer.
- Service of process should be checked. Complaints are often sent by mail. Whether that service is valid on a company in another country depends on international rules such as the Hague Service Convention.
- A company must appear through a lawyer admitted in Delaware or working with Delaware counsel. A letter from a sales or finance manager to the court is not a response.
Records to Preserve Now
Whether your company is in the U.S. or abroad, the outcome of a preference case depends on documents. Preserve, and do not delete:
- Forever 21 purchase orders, invoices and payment records for at least two years before March 16, 2025
- Shipping and delivery records, including bills of lading
- Letters of credit, deposit terms and any factoring agreements
- Emails, WeChat or WhatsApp messages with Forever 21’s buyers and accounts payable team from late 2024 and early 2025
- Any proof of claim you filed in the Forever 21 bankruptcy
What to Do This Week
- Find the summons and note the date it was issued. Your answer deadline runs from that date, not from the day it arrived.
- Gather the records listed above.
- Do not pay, sign a settlement, or send records to the other side until your defenses have been reviewed.
- Contact a preference defense attorney admitted in the Delaware Bankruptcy Court.
Frequently Asked Questions
What are the defenses to a Forever 21 preference lawsuit?
The main defenses are subsequent new value, ordinary course of business and contemporaneous exchange under § 547(c), along with challenges based on the plaintiff’s due diligence duty and the source of the payments.
Does the Forever 21 complaint already account for my defenses?
Usually not. The complaint demands the total of the payments listed on Exhibit A. It is up to the vendor to raise and prove its defenses.
Can a foreign supplier be sued in the Forever 21 bankruptcy?
Yes. The Plan Administrator has sued suppliers in mainland China, Hong Kong, elsewhere in Asia and the Middle East in the U.S. Bankruptcy Court for the District of Delaware.
Do foreign vendors have the same defenses as U.S. vendors?
Yes. The defenses under § 547(c) apply regardless of where the vendor is located.
What if I already responded to the demand letter?
Keep that letter and any reply. It may support an argument that the plaintiff did not consider known defenses before suing.
How long do Forever 21 preference cases take?
Many settle within several months once defenses are exchanged. Pretrial conferences in the first cases are set for December 8, 2026, and cases that do not settle are often sent to mediation.
Talk to a Forever 21 Preference Defense Attorney
Kasen Law Group represents U.S. and foreign vendors in preference cases in the Delaware Bankruptcy Court. We have resolved 75 preference and fraudulent transfer matters with an average claim reduction of 90.8%, many in retail bankruptcies like Rite Aid and Bed Bath & Beyond. We will review your complaint and Exhibit A and tell you what a realistic outcome looks like before you respond.
Call (856) 880-1010 or email Hello@BankruptcyAttorney.co for a free consultation. See the full Forever 21 case list or learn more about our preference defense services.
Bankruptcy Attorney Co. is a trade name of Kasen Law Group, P.C. This article is general information about bankruptcy law and is not legal advice. Prior results do not guarantee a similar outcome. Jenny R. Kasen is admitted to practice before the United States Bankruptcy Courts for the District of Delaware, the District of New Jersey, the Eastern District of Pennsylvania, and the Southern District of Florida.