In re Robert E. Derecktor of Rhode Island, Inc.
United States Bankruptcy Court for the District of Rhode Island
150 B.R. 296 (1993)
- Written by Carolyn Strutton, JD
Facts
Robert E. Derecktor of Rhode Island, Inc. (debtor) was a ship building and repair operation that borrowed millions of dollars prior to filing for bankruptcy. At the time of the bankruptcy, Derecktor owed the Rhode Island Port Authority (creditor) almost $5 million and the Federal Deposit Insurance Corporation (FDIC) (creditor) $7 million. While the Port Authority had secured interests in some of Derecktor’s collateral, the FDIC had a secured interest in all of Derecktor’s assets. The Port Authority only had a secured interest in particular items of equipment, machinery, and inventory. The Port Authority petitioned the bankruptcy court to direct the marshaling of assets to satisfy the FDIC’s claims from the assets not available to the Port Authority in order to preserve assets for the Port Authority’s claims. Several unsecured creditors opposed marshaling assets because marshaling would diminish the assets available for their claims.
Rule of Law
Issue
Holding and Reasoning (Votolato, J.)
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