A top priority lien awarded to a post-bankruptcy lender is superior to a supplier’s right to recover inventory, the Seventh Circuit ruled.
In March 2017, a lender syndicate led by Wells Fargo Bank N.A. provided $80 million debtor-in-possession financing to HHGregg Inc. soon after the department store filed Chapter 11. The syndicate received the priming lien, which trumps pre-existing liens for the rights to the store inventory.
The group’s lien takes priority over Whirlpool Corp.’s statutory right to “reclaim” inventory it delivered within 45 days before the Chapter 11 filing, the U.S. Court of Appeals for the Seventh Circuit said…
