TLP Services, LLC v. Stoebner (In re Polaroid Corp.)
- Eighth Circuit Court of Appeals, Docket no. 11-1553
- On appeal, a creditor claimed the bankruptcy court had misapplied the three part test of Martin v. Commodity Credit Corporation (In re Martin), 761 F.2d 472 (8th Cir 1985), in permitting the use of cash collateral. The decision of the bankruptcy court was upheld even though there were no express findings as to the elements of Martin in the Court's order from the bench or in the Court's later written memorandum. The only evidence in the record was uncontested and was sufficient to support the bankruptcy court's order authorizing the use of cash collateral. While there were a number of administratively consolidated cases involved, and the objecting creditor asserted a claim in one of those cases, the trustee's offer of adequate protection by means of a replacement lien on all of the post-petition assets was the indubitable equivalent in value of the cash collateral where the only record supported the trustee's history in the case of careful segregation of proceeds and the trustee's past projections of recoveries had been realistic.
- Procedural context:
- The trustee filed a verified motion to use cash collateral to recover money from various specific sources and to continue funding another 80 pending adversary proceedings. A creditor purporting to hold a secured claim in one of several estates that were administratively consolidated, filed an unverified objection. The court on appeal found the record sufficient to satisfy the necessary findings to allow the use of the cash collateral and did not require the bankruptcy court to reiterate those facts in specific findings.
- The trustee filed a verified motion to use $3,153,500 of cash collateral to fund recovery of $4,600,000 from various sources as well as funding the continuation of 80 pending adversary proceedings. A creditor holding a secured claim against only one of many administratively consolidated cases objected, but did not offer any opposing affidavit (as required by local rule). The only evidence in the record was that the trustee in the past had carefully segregated the funds of each of the estates and had made accurate predictions of recoveries. The Court ruled from the bench and found the replacement lien adequate, but did not reiterate the evidence in specific findings.
- Federman, Venters, and Nail, Bankruptcy Judges, opinion by Nail.
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!