Suppliers to chapter 11 debtors-in-possession should always ensure that they are not being paid from the debtor’s “cash collateral” without court approval. Marathon Petroleum Company supplied products to debtor Delco Oil in the ordinary course of its business during the bankruptcy case, but was forced to return all of the postpetition payments it received from Delco, pursuant to section 549 of the Bankruptcy Code. Marathon was required to return these payments because they were deemed part of the cash collateral that was secured by Delco’s pre-petition creditor, CapitalSource Finance.
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Collateral (finance), Secured loan, Title 11 of the US Code, Uniform Commercial Code (USA), Trustee, United States bankruptcy court
IUE-CWA v Visteon Corporation, 2010 WL 2735715 (3rd Cir July 13, 2010)
CASE SNAPSHOT
USA, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Life insurance, Good faith, Collective bargaining agreements, Majority opinion, US Congress, Communications Workers of America, Trustee, Second Circuit, United States bankruptcy court, Third Circuit