In re National Sugar Refining Co.
United States District Court for the Southern District of New York
27 B.R. 565 (1983)
The National Sugar Refining Co. (National) (debtor) purchased 6,550 long tons of raw sugar from Czarnikow (plaintiff) pursuant to two contracts dated in August 1981. On August 27, 1981, Czarnikow advised National that the sugar on board a shipping vessel would be delivered as required by the contracts, passing title to National. On September 3, 1981, National filed for Chapter 11 bankruptcy. Thereafter, and prior to delivery of the sugar, Czarnikow notified the bankruptcy court that it was exercising its right of stoppage in transit under the Uniform Commercial Code (UCC) and that adequate assurance of payment was required from National. National argued in response that Czarnikow had no right of stoppage given the bankruptcy filing and that the sugar delivery should be completed. The bankruptcy court ruled in favor of Czarnikow, and National appealed.
Rule of Law
Holding and Reasoning (Sand, J.)
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