Document Type
Research Memorandum
Publication Date
2009
Abstract
(Excerpt)
In In re Whitehall Jewelers Holdings, Inc., No. 08-11261(KG), 2008 WL 2951974 (Bankr. D. Del. July 28, 2008), the court held against Whitehall Jewelers Holdings, Inc. (“Debtors”), in favor of approximately 124 consignment vendors (“Consignment Vendors”), where Debtors sought an order permitting the “free and clear” sale of all of their assets and inventory, including consigned goods from Consignment Vendors. See id. at *1–2. In order to develop a full understanding of the court’s holding, it is necessary to understand its statutory context, specifically sections 363 and 541 of the Bankruptcy Code, as well as Federal Rule of Bankrtupcy Procedure 7001(2), and portions of the UCC pertaining to consignment goods. After a review of the relevant statutes, a discussion of the court’s reasoning will follow with a particular focus on the court’s analysis of the various arguments presented by Debtors, and the interesting way in which the court construed the applicable law, ultimately to the benefit of the consignment vendors.