United States Fourth Circuit

In a suit involving the payment of a termination fee for an electricity tolling agreement on behalf of a bankrupt party to the agreement, judgment for defendant-creditor is reversed where a creditor may not allocate a payment made by a non-debtor guarantor first to interest then to principal, thus preserving the unpaid principal for collection in bankruptcy, since the allocation of a payment in this manner would permit the creditor to collect an amount otherwise disallowed as post-petition interest.

Appellate Information

• Argued 03/13/2007
• Decided 07/10/2007
• Published 07/10/2007

Judges

• Before SHEDD and DUNCAN, Circuit Judges, and SAMUEL G. WILSON, United States District Judge for the Western District of Virginia, sitting by designation.

Court

• United States Fourth Circuit

Counsel

• For Appellees:
  
• ARGUED:  Steven Wilamowsky, Bingham & McCutchen, L.L.P., New York, New York, for Appellants.  Lawrence M. Handlesman, Stroock, Stroock & Lavan, New York, New York, for Appellee.   ON BRIEF:  Jessica S. Etra, Matthew V. Wargin, Willkie, Farr & Gallagher, L.L.P., New York, New York;  Kenneth Oestreicher, Susan J. Roberts, Whiteford, Taylor & Preston, L.L.P., Baltimore, Maryland, for Appellants.  Lisa Bittle Tancredi, Venable, L.L.P., Baltimore, Maryland;  Melvin A. Brosterman, Harold A. Olsen, Stroock, Stroock & Lavan, New York, New York, for Appellee.