Arlington Lf, LLC v. Arlingtonhospitality, Inc., et al

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ARGUED SEPTEMBER 29, 2010

Before BAUER, WOOD, and WILLIAMS, Circuit Judges.

This is a bankruptcy case with a complicated factual and procedural background, but one that boils down to a simple question: who breached the parties’ post-petition financing agreement? Arlington Hospitality, Inc. and its subsidiaries (“Arlington”), operators of the AmeriHost hotel chain, filed for Chapter 11 bankruptcy in August 2005. Arlington needed funds in order to meet its obligations during the pendency of the bankruptcy proceeding, and to that end entered into a post-petition financing agreement on the eve of the bankruptcy filing with Arlington LF, LLC (“LF”), a single-purpose entity that had been created for that purpose. LF lent Arlington $3.53 million under the agreement, but shortly thereafter, relations between the parties soured. LF began to have misgivings about its role as a post-petition lender and signaled that it did not wish to make further loans, while Arlington did not pay certain fees associated with the loan. Shortly thereafter, Arlington’s assets were successfully sold in the bankruptcy proceeding, and Arlington repaid LF the full $3.53 million it had borrowed, with interest. LF, believing it was still owed the additional fees Arlington had not paid, filed a motion in the bankruptcy court to recover them, along with additional default interest. Arlington, believing it had met all of its obligations and owed nothing more to LF, opposed the request. The bankruptcy court held a trial on the matter and ruled in Arlington’s favor, concluding that LF had breached the agreement. The district court reversed and remanded, and the bankruptcy court ruled for LF on the second go-round. The district court again reversed, this time on a different basis, with instructions to the bankruptcy court to rule in Arlington’s favor. LF appeals to us. We conclude that LF repudiated the parties’ agreement, and is not entitled to any additional fees or costs. We affirm.

More From ALM

Discover how AI is transforming small law firms with increased efficiency, accuracy, and productivity. This latest report reveals key insights from a 2024 survey, showcasing how professionals are leveraging AI to improve billable hours and client services. Download now to explore the benefits and elevate your legal practice.

The Positive Impact of AI at Small Law Firms: 4 Key Insights

Brought to you by LexisNexis®
Download Now

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

From Data to Decisions

Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends.

Exclusive Depth and Reach.

Law.com Compass includes access to our exclusive industry reports, combining the unmatched expertise of our analyst team with ALM’s deep bench of proprietary information to provide insights that can’t be found anywhere else.

Big Pictures and Fine Details

Law.com Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms’ financials, staffing, clients, news and events.

The National Law Journal Legal Awards 2024

October 24, 2024
Georgetown, Washington D.C.

The National Law Journal honors attorneys & judges who've made a remarkable difference in the legal profession in the D.C. area.

Learn More

New York Legal Awards 2024

September 05, 2024
New York, NY

The New York Law Journal honors attorneys and judges who have made a remarkable difference in the legal profession in New York.

Learn More

African Legal Awards 2024

September 06, 2024
Johannesburg

The African Legal Awards recognise exceptional achievement within Africa s legal community during a period of rapid change.

Learn More