Compton Corporation, Debtor. Walter Kellogg, Trustee v. Blue Quail Energy, Inc., and Mbank Abilene, N.A.
In the Matter of COMPTON CORPORATION, Debtor. Walter KELLOGG, Trustee, Plaintiff-Appellant, v. BLUE QUAIL ENERGY, INC., Defendant-Appellee, and MBank Abilene, N.A., Appellee
Opinion
ON PETITION FOR REHEARING Before BROWN, JOHNSON and WILLIAMS, Circuit Judges.
PER CURIAM:
We grant the petition for rehearing for the narrow purpose of remanding one additional matter to the district court.
Our previous decision, Matter of Compton Corp., 831 F.2d 586 (5th Cir.1987), remanded this case in order for the district court to determine the amount of interest due on the preference claim. We now hold that on remand the district court needs to make factual findings regarding the amount MBank actually foreclosed on and received from Compton Corp.’s trustee to cover the letter of credit transaction. In addition, the district court needs to determine the amount Blue Quail received from MBank under the letter of credit. The trustee states the amount paid to Blue Quail on June 22, 1982, by MBank totaled *585 $569,932.03, rather than $585,443.85, the face amount of the letter of credit and the amount Compton owed Blue Quail. This is a difference of $15,511.82. Whether this amount was paid to Blue Quail on another occasion by MBank under the letter of credit, whether Blue Quail and MBank reached some kind of compromise on the amount, or whether Blue Quail received this amount directly from Compton Corp. are all factual issues that need to be resolved by the district court on remand.
Overall, the amount of the preference which Blue Quail has to pay over to the trustee, prior to interest adjustments, is limited to the value of the collateral MBank actually foreclosed on to cover the letter of credit transaction. This amount represents the dimunition of the assets in Compton’s estate available to the unsecured creditors. This amount in turn is to be limited by the actual amount Blue Quail received from MBank under the letter of credit transaction.
REHEARING GRANTED.
ADDITIONAL REMAND TO DISTRICT COURT.
How later courts describe this case
Explanatory parentheticals written by citing courts — 4 in all; the most informative distinct ones are shown.
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("When the issuer honors a proper draft under a letter of credit, it does so from its own assets and not from the assets of [the debtor] who caused the letter of credit to be issued.")
Cited by 28 cases
View all citing references →- U.S. Supreme Court1
- U.S. Courts of Appeals10
- Federal District Courts5
- Bankruptcy Courts11
- State Highest Courts1
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