United States Second Circuit

In creditors' appeal from a bankruptcy court's order upholding debtor's objections to their claims under tax indemnification agreements, the order is vacated where: 1) the bankruptcy court's construction of "pay" as that term was used in an agreement at issue nullified debtor's obligation to pay the "Owner Participant" under the agreement upon the occurrence most likely to call its provisions into play - the debtor's insolvency; and 2) the bankruptcy court effectively nullified the agreements by stripping them of their ability to protect the Owner Participant in the event of debtor's default.

Appellate Information

• Decided 06/22/2010
• Published 06/22/2010

Judges

• LEVAL, Circuit Judge., Before LEVAL, RAGGI, and LIVINGSTON, Circuit Judges.

Court

• United States Second Circuit

Counsel

• For Appellant:
  
• Lisa Hill Fenning, Dewey & LeBoeuf LLP, Los Angeles, CA, for Appellant The Northwestern Mutual Life Insurance Company., Richard G. Smolev, Kaye Scholer LLP, New York, N.Y. (Piper A. Brock, on the brief), for Appellants DFO Partnership and AT & T Credit Holdings, Inc., Stephen Sanders, Mayer Brown LLP, Chicago, IL, and Andrew H. Schapiro, David F. Abbott, and John M. Conlon, Mayer Brown LLP, New York, NY, for Amicus Curiae General Foods Credit Corporation in Support of Reversal.


• For Appellees:
  
• Lawrence M. Handelsman, Stroock & Stroock & Lavan LLP, New York, N.Y. (Kristopher M. Hansen and Jayme T. Goldstein, Stroock & Stroock & Lavan LLP, New York, NY, and Michael E. Wiles and Jessica R. Simonoff, Debevoise & Plimpton, LLP, New York, NY, on the brief), for Appellee Delta Air Lines, Inc., Leo T. Crowley, Pillsbury Winthrop Shaw Pittman LLP, New York, N.Y. (Eric Fishman and Margot P. Erlich, on the brief), for Appellee the Bank of New York Mellon, f/k/a the Bank of New York, as Indenture Trustee and Pass Through Trustee., Michael J. Edelman, Vedder Price, P.C., New York, N.Y. (Douglas J. Lipke, on the brief), for Appellees Bank of America, N.A., and Strategic Value Partners, LLC., Mark M. Elliott, Bingham McCutchen LLP, New York, N.Y. (Michael J. Reilly and Joshua Dorchak, on the brief), for Interested-Party Appellees Wilmington Trust Company, as Owner Trustee, Cargill Financial Services International, Inc., Bank of New York, as Indenture Trustee, and The Bank of New York Mellon.