- Case Type:
- Case Status:
- 17-6310 (6th Circuit, Dec 28,2018) Published
- Fees of debtor and committee professionals were properly payable from "carveout" contained in Final Cash Collateral Order, notwithstanding conversion of case to Chapter 7 and despite lender's argument that "carveout" only extended to its adequate protection liens rather than its pre-petition liens.
- Procedural context:
- Appeal from decision of United States District Court for the Eastern District of Kentucky affirming the decisions of the United States Bankruptcy Court for the Eastern District of Kentucky granting the final fee applications of the debtor and committee professionals and overruling the objections of the lender to same.
- U.S. Coal Company and its subsidiaries, including Licking River Mining, LLC ("LR"), were placed into involuntary chapter 11 proceedings. East Coast Miner LLC and East Coast Miner II, LLC ("Lender") had a lien on substantially all of LR's assets, including its cash. Lender and LR negotiated a Final Cash Collateral Order, which included a carveout for the fees of professionals. The case ultimately converted to Chapter 7 and the professionals filed their final fee applications. The Lender objected to the final fee application on the bases that (i) the carveout only extended to the collateral that was the subject of the Lender's adequate protection liens and not their pre-petition liens; and (ii) that the conversion to chapter 7 invalidated the carveout. The Bankruptcy Court granted the final fee application and overruled the Lender's objection and the District Court affirmed.
- Merritt, Daughtrey, and Stranch
2831 in the system
11 Being Processed