In In re Reichhold Holdings US, Inc., Case No. 14-12237 (MFW) (Bankr. Del., Aug. 24), Bankruptcy Judge Mary F. Walrath upheld the validity of a vendor’s administrative claim for its reclamation rights under Section 546(c) of the Bankruptcy Code as against a post-petition DIP lender. In doing so, Walrath declined to follow cases from the Bankruptcy Court of the Southern District of New York that held otherwise.
The Bankruptcy Code recognizes a vendor’s right of reclamation for goods sold to a debtor if the seller has a right of reclamation under state law. A seller seeking reclamation under Section 2-702 of the UCC and Bankruptcy Code Section 546(c) must prove four elements: the debtor was insolvent when the goods were delivered, a written demand was made not later than 45 days after the debtor’s receipt of the goods, nor later than 20 days following the petition date if the 45-day period expired post-petition; the goods were identifiable at the time of the demand; and the goods were in the possession of the debtor at the time of the demand.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
