In re Havens Steel Company
United States Bankruptcy Court for the Western District of Missouri
317 B.R. 75 (2004)
- Written by Noah Lewis, JD
Facts
Havens Steel Company (Havens) (debtor) was a steel-construction company providing design-build services. In February 2003, Havens signed a $7.5 million subcontract with The Austin Company (Austin) (creditor) to design and purchase structural-steel shapes, transform them into usable steel for the construction of a newspaper-printing facility, and erect the finished steel. About $732,284 worth of steel was in various stages of the design-build process but not yet erected. Some remained in Havens’ possession in the fabrication process, some was located at Havens’ plant, and some was stored at the construction site. Austin had paid $538,502.20 for part of the steel located at the plant and part of the fabricated steel delivered to the construction site but not erected. In March 2003, Havens borrowed $15 million from Commerce Bank (Commerce) (creditor). The debt was secured in part by Havens’ inventory, accounts receivable, and any proceeds. Havens’ security agreement provided that Havens could sell inventory to buyers in the ordinary course of business (BIOCs) if Havens was not in default. Havens subsequently filed for bankruptcy and sought a declaratory judgment determining the priority of interests in steel inventory at various locations.
Rule of Law
Issue
Holding and Reasoning (Venters, C.J.)
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