Delaware Business Bankruptcy Report: Morris James LLP Lawyers and Attorneys

Mfrs. and Traders Trust v. Wyo. Sand and Stone, 223 Fed. Appx. 146 (3d Cir. 2007) (Circuit Judge Anthony J. Scirica)

A lender holding a security interest in vehicles of the debtor executed releases of those liens, and delivered those releases to an auctioneer selling the debtor’s vehicles. Execution of the releases prior to auction was purportedly going to assist in obtaining a higher price for the vehicles. An unsecured creditor of the debtor asserted that the proceeds of the sale did not belong to the lender because the liens were released prior to the sale. The Third Circuit Court of Appeals affirmed the bankruptcy court’s holding that by executing the releases, the lender released its liens.

• Email This
• Print
• Comments
• Trackbacks

In re Advanced Marketing Services, Inc., 360 B.R. 421 (Bankr. D. Del. 2007) (Judge Christopher S. Sontchi)

Simon & Schuster asserted a reclamation demand in excess of $5 million, and filed an adversary Complaint against the debtor to enforce its reclamation rights. In support of the complaint, Simon & Schuster sought a temporary restraining order to prevent the debtor from selling its goods. The court denied the application for the TRO, finding that the goods that were the object of the reclamation demand were subject to a prior, superior security interest of the debtors’ pre-petition and post-petition lenders. Accordingly, S&S was unable to show that it had a likelihood of success on the merits.

• Email This
• Print
• Comments
• Trackbacks