The trustee (or debtor in possession, DIP) has authority to recover for the benefit of the Bankruptcy estate certain property transferred from the debtor to a third person before or after the filing of the petition. To accomplish this, the trustee or DIP may avoid unauthorized, unperfected or preferential security interests in, or preferential transfers of, property of the estate.
The purpose of these “avoiding powers” is to enable the trustee or DIP to invalidate transfers that unfairly benefit particular creditors. These “strong-arm” provisions of the code are of vital importance to all creditors to ensure the policy of equality of distribution among creditors of equal standing.