Quimbee logo
DMCA.com Protection Status

Financial Security Assurance Inc. v. T-H New Orleans Limited Partnership

116 F.3d 790 (1997)

Case BriefRelatedOptions
From our private database of 35,600+ case briefs...

Financial Security Assurance Inc. v. T-H New Orleans Limited Partnership

United States Court of Appeals for the Fifth Circuit

116 F.3d 790 (1997)

Facts

In 1988 T-H New Orleans Limited Partnership (T-H) (debtor) purchased and began operating a hotel. In 1989 T-H restructured its mortgage debt through a mortgage note. Financial Security Assurance Inc. (Financial) (creditor) guaranteed the note. In 1990 T-H defaulted on the note. Financial accelerated the note and demanded immediate payment. T-H filed for Chapter 11 bankruptcy. Financial’s allowed claim in the bankruptcy proceedings was approximately $18.5 million. Financial filed a motion for adequate protection of its claim. The bankruptcy court granted Financial’s motion, holding that Financial had a security interest in the hotel’s prepetition and postpetition revenues. The bankruptcy court ordered T-H to begin making payments to Financial from the hotel’s revenue to begin paying down T-H’s obligation to Financial. T-H paid Financial approximately $4.7 million in hotel revenues, decreasing Financial’s claim to approximately $13.75 million. The bankruptcy court determined that the fair market value of the hotel was $13.7 million and would increase over time. Because Financial’s claim was greater than the value of the hotel, Financial was undersecured. The bankruptcy court found that Financial was not entitled to postpetition, preconfirmation interest on its claim until the value of the hotel exceeded Financial’s claim. The bankruptcy court believed that Financial’s claim would become oversecured in October 1994, at which point Financial would be entitled to interest. In 1995 the bankruptcy court confirmed a reorganization plan for T-H that included its determinations regarding Financial’s claim. Financial appealed, arguing that, under 11 U.S.C. § 506(b), it was entitled to postpetition, preconfirmation interest on its claim from the date of T-H’s bankruptcy petition, regardless of the fact that its claim was undersecured.

Rule of Law

Issue

Holding and Reasoning (Parker, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 618,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 618,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 618,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 35,600 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership