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urgently need advice on "bankruptcy preference"

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In 1994 wife purchased from dealer a new 1994 vehicle.

In November 1999 wife sold vehicle to friend for $2500.

In Sept 2000 we needed vehicle for son and friend agreed to sell back vehicle for $1500.

Without our prior knowledge, in early 2001 friend filed Chapter 7. When questioned about vehicle at 341 meeting he stated no money had exchanged hands, when in reality it had.

Two weeks ago friend received discharge of Chapter 7, however, trustee's attorney is now demanding we turn over vehicle (or comparable value) because of "preference".

What options do we have in this?


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