Latest Decision on Intersection of Reclamation Rights and DIP Liens

Simon Fraser, a member of Cozen O'Connor's Bankruptcy, Insolvency & Restructuring Practice Group, wrote an article for the American Bankruptcy Institute Journal focusing on reclamation rights and DIP liens. In Whirlpool Corp. v. hhgregg Inc. (In rehhgregg Inc.),1 the U.S. Bankruptcy Court for the Southern District of Indiana became the latest court to split the case law regarding the tension between a seller’s reclamation rights on goods sold to the debtor and the debtor-in-possession (DIP) lender’s liens on those same goods. In holding that the lender’s rights were superior to the seller’s, the bankruptcy court sided with courts from the Southern District of New York and declined to follow a 2008 Sixth Circuit decision and a 2016 bankruptcy court decision to the contrary.

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Simon E. Fraser

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