You are here

Barber & Ross Co. v. SCP Building Prods., LLC (In re Barber & Ross Co.) (Case No. 07-50546; A.P. No. 09-05081) 06/24/2010

            The parties filed competing motions for summary judgment asserting entitlement to certain monies held in an escrow account which were disbursed to the defendant within days after the commencement of the bankruptcy case.  The Court determined that funds in an escrow account are not property of the estate when the escrow fund has served as “an assurance or guarantee fund.” The Court further noted that the filing of the petition against the debtor did not remove the escrowed money from the strictures of the escrow agreement, but it did subject the debtor’s as well as the defendant’s  rights in the account to applicable provisions of the Bankruptcy Code.  The Court concluded that the wiring of the escrow account balance to the defendant after the filing of the petition was an “act” which enabled the defendant to “recover a claim against the debtor which arose before the commencement” of the debtor’s bankruptcy case within the meaning of § 362(a)(6).  The Court denied both motions for summary judgment.

Date: 
Thursday, June 24, 2010
Category: 
Adversary Proceedings
Automatic Stay
Chapter 11 Issues
Property of the Estate
Chapter: 
11