Wilmington Savings Fund Society FSB won one court contest and partially lost another with vendors that furnished pre-bankruptcy inventory on consignment to the now-defunct Sports Authority sporting goods chain.
The two Nov. 26 decisions from the U.S. Bankruptcy Court for the District of Delaware came after WSFS sought to force the vendors to disgorge sale proceeds they received from Sports Authority consignment sales. The bank argued that the proceeds were the bank’s collateral under general financing that was secured by Sports Authority’s inventory and assets.
The decisions resolve tensions around competing security interests—one that comes with a loan and another ...
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