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Vendor's Reclamation Rights Survive Lien of Post-Petition DIP Loan

By Barry M. Klayman and Mark E. Felger
November 01, 2016

In In re Reichhold Holdings US, Inc., Case No. 14-12237 (MFW) (Bankr. Del., Aug. 24), bankruptcy judge Mary F. Walrath upheld the validity of a vendor's administrative claim for its reclamation rights under Section 546(c) of the Bankruptcy Code as against a post-petition DIP lender. In doing so, Judge Walrath declined to follow cases from the Bankruptcy Court of the Southern District of New York that held otherwise.

Background

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