RFBN Wins in 7th Circuit on Behalf of Banking Client

RFBN partner Edward P. Freud represented a community bank that prevailed before the 7th Circuit, thereby facilitating a large recovery for his client in connection with the bankruptcy proceedings. The bank had filed a secured claim asserting a blanket lien in substantial equipment assets that were part of the corporate debtor’s estate. The plan administrator brought an adversary complaint against Mr. Freud’s client seeking to declare its blanket lien invalid, avoid a purported fraudulent transfer, and preclude the bank from prosecuting claims related to the debtor in other forums. After the bank brought a dispositive motion, the plan administrator abandoned the adversary proceedings and agreed to a favorable settlement. As a result, the largest secured creditor of the estate objected to the Rule 9019 motion to approve settlement, which the bankruptcy judge granted. That creditor appealed to the District Court, which affirmed the decision of bankruptcy judge. The creditor then appealed to the 7th Circuit, which affirmed both decisions below in favor of Mr. Freud’s client.