Case Citation
Legal Case Name

Whirlpool Corp. v. hhgregg, Inc. (In re hhgregg, Inc.) Case Brief

United States Bankruptcy Court, S.D. Indiana2017Docket #65790376
578 B.R. 814 Bankruptcy Law Secured Transactions Commercial Law

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A seller attempted to reclaim goods from a bankrupt buyer. The court held that the seller’s reclamation right was subordinate to a lender’s pre-existing, floating security interest in the buyer’s inventory, based on the plain language of the Bankruptcy Code.

Legal Significance: This case clarifies that post-BAPCPA, a seller’s reclamation right under § 546(c) is explicitly subordinate to a prior perfected security interest, eliminating the need to analyze the secured creditor’s “good faith purchaser” status under the UCC within a bankruptcy proceeding.

Whirlpool Corp. v. hhgregg, Inc. (In re hhgregg, Inc.) Law School Study Guide

Use this case brief structure for your own legal analysis. Focus on the IRAC methodology to excel in law school exams and cold calls.

Case Facts & Court Holding

Key Facts & Case Background

hhgregg, Inc., a retailer, had a prepetition credit facility with Wells Fargo, secured by a first-priority floating lien on substantially all assets, including existing and after-acquired inventory. In the 45 days before hhgregg filed for Chapter 11 bankruptcy, Whirlpool Corp. sold goods to hhgregg in the ordinary course of business. After the bankruptcy filing, Whirlpool made a timely written demand to reclaim these goods pursuant to UCC § 2-702 and Bankruptcy Code § 546(c). The bankruptcy court then approved a debtor-in-possession (DIP) financing agreement, also with Wells Fargo as agent, which granted Wells Fargo priming, first-priority liens on the same collateral, effective as of the petition date. The DIP loan proceeds were used to pay down the prepetition debt, and Wells Fargo was also granted replacement liens to adequately protect its prepetition security interest. The hhgregg reorganization ultimately failed, and all inventory, including the Whirlpool goods, was sold. Whirlpool commenced an adversary proceeding, seeking a declaration that its reclamation right in the goods or their proceeds was superior to Wells Fargo’s security interest.

Court Holding & Legal Precedent

Issue: Under § 546(c) of the Bankruptcy Code as amended by BAPCPA, does a seller’s right to reclaim goods from an insolvent debtor take priority over a secured creditor’s pre-existing and continuous floating lien on the debtor’s after-acquired inventory?

No. The court granted summary judgment for the secured lender, Wells Fargo. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia

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IRAC Legal Analysis

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Legal Issue

Under § 546(c) of the Bankruptcy Code as amended by BAPCPA, does a seller’s right to reclaim goods from an insolvent debtor take priority over a secured creditor’s pre-existing and continuous floating lien on the debtor’s after-acquired inventory?

Conclusion

The decision solidifies the priority of secured creditors with floating liens over Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco labo

Legal Rule

A seller's right of reclamation under 11 U.S.C. § 546(c) is expressly Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in v

Legal Analysis

The court's analysis centered on the dispositive effect of the 2005 BAPCPA Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, c

Flash-to-Full Case Opinions

Flash Summary

  • The 2005 BAPCPA amendment to 11 U.S.C. § 546(c) makes a
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occae

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