In re Mauch Chunk Brewing Co.

12 Citing cases

  1. In re Britton

    83 B.R. 914 (Bankr. E.D.N.C. 1988)   Cited 38 times
    Finding that a creditor waives its right to setoff in a Chapter 11 or 12 case by failing to assert setoff in an original proof of claim

    Waiver or Estoppel: The right to set-off is a privilege vested in the creditor with a claim against the debtors. If it is not timely and properly exercised, it is waived. In re Mauch Chunk Brewing Co., 131 F.2d 48 (3rd Cir. 1942). Or if the creditor's conduct is such as to mislead other parties to their detriment, the creditor may be estopped from exercising the right.

  2. Schoenmann v. Bank of the W. (In re Tenderloin Health)

    849 F.3d 1231 (9th Cir. 2017)   Cited 19 times   2 Legal Analyses

    These facts are significant because the voluntary turnover to the trustee of the property subject to a creditor's right of setoff generally precludes any subsequent claim of setoff by the creditor. See Citizens Bank of Md. v. Strumpf, 516 U.S. 16, 20, 116 S.Ct. 286, 133 L.Ed.2d 258 (1995) (noting that requiring a creditor immediately to turnover funds on account "would divest the creditor of the very thing that supports the right of setoff"); In re Mauch Chunk Brewing Co., 131 F.2d 48, 49 (3d Cir. 1942) (finding that when trustee withdrew funds from account with bank's knowledge of bankruptcy filing, bank's acquiescence was "tantamount to renunciation of its privilege of setoff"). If BOTW loses this preference action, it might be able revive its right of setoff given "court[s] may remedy the effect of an inadvertent, involuntary or improper dissipation of the creditor's interest." Collier ¶ 553.07; see also In re Archer, 34 B.R. 28, 31 (Bankr. N.D. Tex. 1983) (finding where bank had mistakenly turned over property it did not intentionally waive its right of setoff).

  3. In re Calore Express Co., Inc.

    288 F.3d 22 (1st Cir. 2002)   Cited 46 times
    Holding that waiver of set off rights, whether express or implied, is not necessarily irrevocable

    For example, the voluntary payment by the creditor of its debt to the debtor, without any reservation of a right of setoff, waives that right. In re Mauch Chunk Brewing Co., 131 F.2d 48 (3d Cir. 1942) (so holding with regard to a bank's payment of an account to a trustee in bankruptcy). This circuit has held that payment in obedience to a court's judgment, which is not voluntary, is therefore not waiver, even though the creditor had the opportunity to seek a stay of the judgment and chose not to do so. Pub. Serv. Co. of N.H. v. N.H. Elec. Coop., Inc., 884 F.2d 11, 13 (1st Cir. 1989).

  4. First National Bk. in Fort Lauderdale v. Davis

    317 F.2d 770 (5th Cir. 1963)   Cited 6 times

    11 U.S.C.A. §§ 501 et seq. See In re Hotel Martin Co. of Utica, 2 Cir., 1936, 83 F.2d 231; and In re Mauch Chunk Brewing Co., 3 Cir., 1942, 131 F.2d 48, 143 A.L.R. 451. We think the rule is the same in Chapter XI proceedings.

  5. Chassen v. United States

    207 F.2d 83 (2d Cir. 1953)   Cited 14 times
    Holding that a clarification by the government was "the equivalent of an amendment of [the government's] proof of claim"

    See also Lewith v. Irving Trust Co., 2 Cir., 67 F.2d 855, 856; In re Meade Tool Die Co., 6 Cir., 164 F.2d 228, 230-231; In re Prindible, 3 Cir., 115 F.2d 21, 23; Hartford Accident Indemnity Co. v. Coggin, 4 Cir., 78 F.2d 471, 477; Union National Bank v. McKey, 7 Cir., 102 F. 662; In re Myers, D.C.Ind., 99 F. 691; cf. Hutchinson v. Otis, 190 U.S. 552, 555, 23 S.Ct. 778, 47 L.Ed. 1179; U.S. National Bank v. Chase National Bank, 331 U.S. 28, 35-36, 67 S.Ct. 1041, 91 L. Ed. 1320. In so far as In re Mauch Chunk Brewing Co., 3 Cir., 131 F.2d 48, 143 A.L.R. 451, may be considered contra, we disagree with it. To the effect that waiver is the "intentional relinquishment of a known right," see Lehigh Valley R. Co. v. Providence-Washington Insurance Co., 2 Cir., 172 F. 364, 365; Clark v. West, 193 N.Y. 349, 360, 86 N.E. 1.

  6. In re Susquehanna Chemical Corp.

    81 F. Supp. 1 (W.D. Pa. 1949)   Cited 18 times
    In Susquehanna, the court refused to consider fractions of a day and accordingly denied a bank's petition to set off certain deposits made by a debtor on the day the debtor's bankruptcy petition was filed.

    Furthermore, the United States Court of Appeals for the Third Circuit has stated "it is questionable [in a reorganization proceeding] whether a bank can set off a debtor's unmatured obligation against its deposit." In re Mauch Chunk Brewing Co., 3 Cir., 131 F.2d 48, 49, 143 A.L.R. 451. No consideration has been given in any reported case that I have been able to find, which decides the question as to the absolute right of set-off in a reorganization proceeding where the note is matured and the debtor is solvent.

  7. In re Barefoot

    CASE NO. 12-02160-8-DMW (Bankr. E.D.N.C. Mar. 18, 2014)   Cited 1 times

    In its discussion the Court noted that the "right to set-off is a privilege vested in the creditor with a claim against the debtors. If it is not timely and properly exercised, it is waived." Id. At 919 (citing In re Mauch Chunk Brewing Co., 131 F.2d 48 (3rd Cir. 1942). The Court emphasized the importance of creditors asserting their right to setoff in a timely and accurate manner "so as to permit the debtor to timely file a plan and other creditors to decide whether to object to the plan."

  8. In re Reliance Acceptance Group, Inc.

    Case No. 98-288 (PJW), Adv. Proc. No. A-98-310, Chapter 11 (Bankr. D. Del. Dec. 6, 2000)   Cited 2 times
    Noting that cases finding waiver as the result of the failure to assert setoff before surrendering possession are factually distinct from cases where the creditor transfers money at the behest of the bankruptcy trustee

    denied 525 U.S. 929, 119 S.Ct. 336, 142 L.Ed. 277 (1998); In re Bevill, Bresler Schulman, 896 F.2d at 58-59 (denying bank's right to setoff against coupon interest on bonds held by bank where bank was merely a trustee for the debtor and there was no mutual debt and claim between creditor and the debtor); Lee v. Schweiker, 739 F.2d 870, 876 n. 10 (3d Cir. 1984) (holding that a post-bankruptcy setoff is substantively barred by § 553); Cooper-Jarrett, Inc. v. Central Transport, Inc., 726 F.2d 93, 96-97 (3d Cir. 1984) (holding that there was no right to setoff the debt which creditor owed debtor under a post-petition settlement agreement which resolved a pre-petition claim against the debtor); United States v. Norton, 717 F.2d 767, 774 (3d Cir. 1983) (bankruptcy court clearly acted within its powers in staying IRS from setting-off chapter 13 debtors' prepetition tax liability against post-petition tax refund where IRS failed to object to debtors' chapter 13 plan prior to confirmation); In re Mauch Chunk Brewing Co., 131 F.2d 48, 50 (3d Cir. 1942) (holding that bank relinquished whatever right to setoff it may have had when the bank manifestly and without reservation did all it possibly could have done to transfer debtor's account balances to the bankruptcy trustee); Lessig Constr., Inc. v. Schnabel Assocs., Inc. (In re Lessig Constr. Inc.), 67 B.R. 436, 441 (Bankr. E.D.Pa. 1986) ("Our Court of Appeals has, consistently . . . restricted efforts by creditors, even governmental creditors, to utilize setoff."); accord In re Public Serv. Company, 884 F.2d at 13 ("[T]he circle of creditors entitled to exercise setoff rights in bankruptcy is tightly circumscribed."). Williams' predicament is more like that of the creditor in Metro.

  9. In re United Marine Shipbuilding, Inc.

    198 B.R. 970 (Bankr. W.D. Wash. 1996)   Cited 4 times

    Other cases cited by the Trustee, NBA and Evergreen can be distinguished on the same basis. See, e.g., Cumberland Glass Manufacturing v. De Witt and Co., 237 U.S. 447, 456, 35 S.Ct. 636, 639, 59 L.Ed. 1042 (1915) (Creditor took no action until after payment); In re Mauch Chunk Brewing Co., 131 F.2d 48, 49 (3d. Cir. 1942) (Creditor did not assert its right before releasing the fund); In re Royal Crown Bottling Company of Boaz, Inc., 29 B.R. 52, 53 (N.D.Ala. 1981) (Bank did not know of or did not assert setoff right before it paid the funds to trustee); In re Cloverleaf Farmer's Co-Op., 114 B.R. 1010, 1018 (Bankr.D.S.D. 1990) (Funds had already been disbursed before setoff right was asserted); In re Wilson, 49 B.R. 19 (Bankr. N.D.Tex. 1985) (Facts not clear that Small Business Administration asserted right of setoff in bankruptcy before IRS paid tax refund to trustee). In all of these cases, the so-called "mistake" was the creditors' payment of the funds against which a setoff could be made without recognizing or asserting the right of setoff.

  10. Matter of Litchfield Const. Management

    137 B.R. 98 (Bankr. D. Conn. 1992)   Cited 8 times
    Denying bank's attempt to assert set-off six months after transferring debtor's bank balance to trustee

    Id. at 54. See also, In re Mauch Chunk Brewing Co., 131 F.2d 48, 49 (3rd Cir. 1942) (where bankruptcy trustee withdraws funds from account at bank with bank's knowledge of bankruptcy filing, bank's action "tantamount to renunciation of its privilege of setoff." Setoff "is a privilege which the creditor may or may not claim. If it is not asserted, it is lost."); Crispell v. Landmark Bank (In re Crispell), 73 B.R. 375, 380-81 (Bankr.E.D.Mo. 1987) ("The Bank . . . by voluntarily releasing funds in the checking account to the Debtor. . . . waived whatever setoff rights it may have had.