World Imports, Ltd. v. OEC Group New York (In re World Imports, Ltd.)
United States Court of Appeals for the Third Circuit
820 F.3d 576 (2016)
- Written by Rich Walter, JD
Facts
OEC Group New York (OEC) (defendant) shipped cargo around the world under contract with World Imports, Ltd. (plaintiff). The contract clearly stipulated that OEC’s maritime liens would attach to any existing or future indebtedness incurred by World Imports and that the liens would survive the delivery or release of any specific World Imports cargo. World Imports subsequently declared Chapter 11 bankruptcy. At the time, World Imports owed OEC a significant sum for previous cargo shipments, and a current shipment of World Imports cargo sat in OEC’s warehouses, awaiting delivery. OEC petitioned the bankruptcy court for permission to retain the current shipment as payment for World Imports’ previous cargo shipments. World Imports challenged OEC’s petition. The bankruptcy court, affirmed by the district court, ruled that OEC had delivered the previous cargoes unconditionally, thereby waiving OEC’s maritime liens on those cargoes and simultaneously waiving OEC’s right to extend those liens to World Imports’ current cargo. OEC appealed to the Third Circuit.
Rule of Law
Issue
Holding and Reasoning (Jordan, J.)
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