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In re Wright Group, Inc.

United States Bankruptcy Court for the Northern District of Indiana
443 B.R. 795 (2011)

Written by Rich Walter, JD

Facts

The Wright Group, Inc. (Wright) (plaintiff), the operator of a miniature-golf course, put up the course equipment as collateral for a loan from Fifth Third Bank (bank) (defendant). Wright’s patrons paid a uniform cash fee to enter and use the course. Although patrons could use their own equipment if they so wished, most patrons played using Wright’s equipment, which patrons could borrow at no extra charge. Wright subsequently petitioned for Chapter 11 bankruptcy, thereby effectively disposing of the bank’s loan collateral. Wright moved for a court order allowing Wright to keep whatever prepetition course fees were still in Wright’s possession. The bank objected, claiming that those fees constituted proceeds collected on account of its disposed collateral.

Rule of Law

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Holding and Reasoning (Klingeberger, J.)

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