- Case Type:
- Case Status:
- No. 19-11050 (5th Circuit, Aug 11,2020) Published
- Fifth Circuit affirmed ruling of district court (ND Tx), which affirmed ruling of bankruptcy court dismissing creditor's claims against non-debtor bank for failure to state a claim. Unsecured creditor had no claim against secured creditor bank for sweeping debtor's bank account. Secured creditor did not convert debtor's assets by exercising valid remedy. Unsecured creditor had no basis to allege that it owned or possessed the account funds. Unsecured creditor had no facts to provide elements of unjust enrichment. Secured creditor validly exercised its remedies.
- Procedural context:
- Bankruptcy court (ND Tx) granted defendant's motion to dismiss for failure to state a claim. Plaintiff appealed to US District Court, which affirmed. Plaintiff appealed to Fifth Circuit.
- BBX Operating, L.L.C., drilled and operated wells in Texas. Murphy Energy Corporation transported oil condensate and natural gas liquids to market. In September 2008, BBX and Murphy entered into a contract for the sale and purchase of natural gas liquids and condensate. Under the contract, BBX extracted natural gas, and Murphy, after identifying the best market for the natural gas, transported it to third-party customers. These third-party customers then wired payment to a Bank of America bank account in Murphy’s name. Pursuant to the agreement, Murphy would take a flat marketing fee and a variable transportation fee from those funds. At the end of each month, Murphy calculated transportation costs and provided BBX with a statement estimating BBX’s share. After receiving the statement, BBX would send Murphy a payment instruction letter. Murphy then remitted the agreed upon funds to BBX, which then distributed payments to working interest owners and royalty owners consistent with their respective ownership interest in the wells that produced the natural gas. This arrangement operated smoothly until June 2016 when Bank of America allegedly swept funds from Murphy’s account. Later that year, Murphy filed for bankruptcy.
- Smith, Graves, Ho
In re Barbara Wigley
Summarizing by Bradley Pearce
Publicly Traded Firms Paid Dividends, Bought Their Own Stock after Receiving PPP loans to Pay Employees
3145 in the system
1 Being Processed