Arkwright-Boston Manufacturers Mutual Insurance Co. v. Great Western Airlines Inc. - United States Court of Appeals for the Eighth Circuit

Arkwright-Boston Manufacturers Mutual Insurance Co. v. Great Western Airlines Inc.

By United States Court of Appeals for the Eighth Circuit

  • Release Date - Published: 1985-09-26
  • Book Genre: Law
  • Author: United States Court of Appeals for the Eighth Circuit
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Arkwright-Boston Manufacturers Mutual Insurance Co. v. Great Western Airlines Inc. United States Court of Appeals for the Eighth Circuit read online review & book description:

Over a period of several years, Barclays American/Business Credit, Inc. (Barclays), as successor in interest to Aetna Business Credit, Inc., loaned substantial sums of money to A&C Johnson Co. (A&C). The loans were calculated as a percentage of inventory, which ranged from $1.3 to $1.7 million, and were secured by A&Cs accounts receivable. Proceeds from the accounts were to be deposited in a special "collateral" account maintained by A&C. Long, president and majority stockholder in A&C, was also guarantor on the loans. A&C and Long both filed for bankruptcy and Barclays now seeks to prevent discharge of debts resulting from Longs guaranty by alleging (1) misconduct in obtaining some $90,000 worth of additional loans by inflating inventory valuation and (2) misconduct in diverting $139,120.97 worth of collateral (i.e. accounts receivable proceeds) to a new corporate account. Long used the diverted proceeds for attorneys fees and other expenditures to keep A&C functioning as an active business, an effort which quickly failed when Barclays refused further credit while A&C was in Chapter 11 reorganization.

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