Helms v. Certified Packaging Corp.
United States Court of Appeals for the Seventh Circuit
551 F.3d 675 (2008)
Sarah Michaels, Inc. (Michaels) filed for bankruptcy. The bankruptcy trustee, Brenda P. Helms (plaintiff), sued Certified Packaging Corporation (Certified) (defendant) to recover payments Michaels made to Certified. Helms was granted a default judgment for $2 million. LaSalle Bank (LaSalle) was the assignee of a loan made to Certified, though LaSalle later assigned its interest to CPC Acquisition. LaSalle had a security interest in Certified’s equipment. After Certified took the loan, it suffered a fire that resulted in property damage and business losses. Certified sued Rothschild, its insurance broker, for negligently failing to include the property in its business-loss insurance policy. Rothschild settled for $88,000. Certified also sued Commonwealth Edison (Com Ed), alleging that its negligence had caused the fire. The lawsuit is ongoing, but Certified is seeking $2,000,000 in damages, of which roughly ten percent relates to property loss and the rest to business losses. When Helms attempted to collect on her default judgment, LaSalle asserted its security interest in all of Certified’s assets. Both Helms and LaSalle claim the proceeds of both of Certified’s lawsuits. The bankruptcy court awarded the Rothschild settlement to Helms, but the district court reversed. The bankruptcy court also awarded the business-loss portion of the Com Ed claim to Helms, which was affirmed by the district court. Helms and LaSalle filed cross-appeals to the United States Court of Appeals for the Seventh Circuit.
Rule of Law
Holding and Reasoning (Posner, J.)
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