Agway liquidating

which required Agway to indemnify Fidelity for attorneys' fees that it might incur to enforce the Agreements against Agway.

Fjermedal, Lacy Katzen LLP, Rochester, New York; Filiberto Agusti, Mark Moran, Joshua R. DENNIS JACOBS, Chief Judge: The federal Bankruptcy Code ("Code"), 11 U. Fidelity & Deposit Company of Maryland ("Fidelity") entered into several agreements ("the Agreements") with Agway, Inc.

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agway liquidating-89

Accord SNTL, 571 F.3d at 844 ("[W]e reject the position ... "[C]laims enforceable under applicable state law will be allowed in bankruptcy unless they are expressly disallowed." Travelers, 549 U. Section 506(b) provides in relevant part that "interest on [a] claim, and any reasonable fees, costs, or charges provided for under the agreement or State statute under which such claim arose" can be recovered if the creditor is oversecured. It was therefore decisive in Travelers that "the Code says nothing about unsecured claims for contractual attorney's fees incurred while litigating issues of bankruptcy law." 459 U. at 453, , it is decisive here that the Code says nothing about such fees incurred litigating things other than issues of bankruptcy law. Ogle's argument relies on expressio unius: Because section 502(e)(2) provides an exception to section 502(b) for reimbursement and contribution, it thereby forecloses an exception for post-petition attorneys' fees.

J.) held that Fidelity can collect 4,506.28 in post-petition attorneys' fees. This opinion considers whether United Merchants survives statutory revisions and the Supreme Court's decision in Travelers Casualty & Surety Co. Two Code provisions bear upon the disputed question: section 502(b) and section 506(b). A claim, in turn, is a "right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured." 11 U. "A claim will be deemed to have arisen pre-petition if the relationship between the debtor and the creditor contained all of the elements necessary to give rise to a legal obligation — a right to payment — under the relevant non-bankruptcy law." Id.

The United States District Court for the Northern District of New York (Sharpe, J.) affirmed. We affirm, concluding that the Code does not prohibit an unsecured creditor from collecting post-petition attorneys' fees pursuant to an otherwise enforceable pre-petition contract of indemnity. Travelers addresses the first, and United Merchants the second. at 129 (internal quotation marks omitted); see also SNTL 571 F.3d at 843-44.

Timbers of Inwood Forest Associates, Ltd., (1988), which explained that section 506(b) allows an oversecured creditor to receive post-petition interest only out of the "security cushion," but that an undersecured creditor — who lacks any such cushion — "falls within the general rule disallowing postpetition interest." Id. From the italicized phrase Ogle would deduce a general rule favoring his position. Rather than providing an undeserved bonus for one creditor at the expense of others, allowing a claim under a collection costs provision merely effectuates the bargained-for terms of the loan contract. Although United Merchants was construing the predecessor to the current Bankruptcy Code, see id. 1, its analysis is equally applicable to the Code today.

However, the wording references section 502(b)(2) of the Code, which expressly disallows a claim for interest that is unmatured. For the foregoing reasons, we affirm the judgment of the district court.

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