PNC BANK, National Association v. Spring Ford Industries, Inc. a/k/a Spring Ford Kni

UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: 	Chapter 11
:
SPRING FORD INDUSTRIES, INC., 	: 	Bankruptcy No. 02-15015DWS
aka Spring Ford Knitting Company, Inc., 	:
:
Debtor. 	:
:
PNC BANK, National Association, 	: 	Adversary No. 04-0479
:
Plaintiff, 	:
:
v. 	:
:
SPRING FORD INDUSTRIES, INC., 	:
aka Spring Ford Knitting Company, Inc., 	:
COMMONWEALTH OF PENNSYLVANIA, 	:
DEPARTMENT OF LABOR & INDUSTRY, 	:
SELF-INSURANCE DIVISION, BUREAU OF 	:
WORKERS’ COMPENSATION [dsm’d 8/26/04] 	:
:
Defendants. 	:
MEMORANDUM OPINION
BY: 	DIANE WEISS SIGMUND, Chief United States Bankruptcy Judge
Before the Court is the Motion of Plaintiff PNC Bank, National Association (“PNC”),
for Summary Judgment (“PNC’s Motion”) and the response thereto and Cross-Motion for
Summary Judgment of Debtor/Defendant Spring Ford Industries, Inc. (“Debtor” and
“Debtor’s Motion”). 	For the reasons stated herein, PNC’s Motion shall be denied and
Debtor’s Motion shall be granted.
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1 While statements in briefs are not evidence, the parties’ memoranda agree as to the
relevant background facts. While a court may not take judicial notice sua sponte of facts
contained in the debtor’s file that are disputed, In re Augenbaugh, 125 F.2d 887 (3d Cir. 1942),
it may take judicial notice of adjudicative facts “not subject to reasonable dispute ... [and] so
long as it is not unfair to a party to do so and does not undermine the trial court’s factfinding
authority.” In re Indian Palms Assoc., 61 F.3d 197, 205 (3d Cir. 1995)(citing Fed.R.Evid.
201(f) advisory committee note (1972 proposed rules).
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UNCONTESTED FACTUAL AND PROCEDURAL BACKGROUND
The parties agree that the relevant facts are uncontested 1 and that disposition of the
motions turns on issues of law. Debtor was formerly a manufacturer of textile products. As
an employer with employees in Pennsylvania, Debtor was subject to the Pennsylvania
Workers’ Compensation Act, 77 P.S. § 1-2626 et seq. Pursuant to the statute, Debtor chose
to 	become 	a 	self-insurer, 	which 	means 	that 	Debtor 	paid 	its 	employees’ 	workers’
compensation claims rather than obtaining private insurance or insurance through the
Pennsylvania’s State Workers’ Insurance Fund. See In re Sacred Heart Hospital, 212 B.R.
467, 470 (E. D. Pa. 1997) (explaining options available to employers under Workers’
Compensation Act). 	In order to obtain self-insurer status, Debtor was required by the
Department 	of 	Labor 	and 	Industry, 	Self-Insurance 	Division, 	Bureau 	of 	Workers’
Compensation (the “Bureau”) to post security for the payment of its workers’ compensation
liability. 77 P.S. § 501(a)(2).
To cover this security obligation, Debtor arranged for PNC to issue a letter of credit
in favor of the Bureau on Debtor’s behalf, in the amount of one million dollars (the “Letter
of Credit”). To this effect, on January 6, 1994, Debtor and PNC entered into an agreement
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2 The parties simply attached documents to their respective motions without any affidavit
support. As no objection has been made to these documents by either side, I will consider them in
deciding the motions. “As is true with other material introduced on a summary judgment motion,
uncertified or otherwise inadmissible documents may be considered by the court if not challenged.”
10A Charles A.Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 2722,
at 384 (1998). Accord Johnson v. United States Postal Service, 64 F.3d 233, 237 (6th Cir. 1995)
(ruling that the “failure to object to evidentiary material submitted in support of a summary
judgment motion constitutes a waiver of those objections.”); H. Sand & Co., Inc. v. Airtemp
Corporation, 934 F.2d 450, 454-55 (2d Cir. 1991) (Rule 56 does not require parties to authenticate
documents “where appellee did not challenge the authenticity of the documents in the district
court.”); Dautremont v. Broadlawns Hospital, 827 F.2d 291, 294-95 (8th Cir. 1987) (affirming
summary judgment where appellant failed to object in district court to its consideration of
documents not in compliance with Rule 56 and failed to demonstrate that district court’s
consideration of documents constituted reversible error); Giovacchini v. Perrine (In re Giovacchini),
1995 WL 80102, at *3 n.1 (E.D. Pa. Feb. 27, 1995) (citing Federal Practice and Procedure § 2722)
(holding that unauthenticated medical reports would be considered in ruling on motion for summary
judgment since no objection was raised thereto).
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titled “Acknowledgment of Terms and Conditions on Posting Letters of Credit” Exhibit 1 to
Debtor’s 	Motion 	(the 	“Acknowledgment”).2 The 	Bureau 	was 	not 	a 	party 	to 	the
Acknowledgment, but the document nevertheless provides a list of circumstances under
which the Bureau may draw on the Letter of Credit, including if it is notified that the Letter
of Credit will not be renewed. Id. ¶ 4. The Acknowledgment also states that Debtor will
enter into a trust agreement that provides for the establishment of a trust fund to hold the
proceeds from the Letter of Credit. Id. ¶ 3.
On January 10, 1994, PNC issued the Letter of Credit, titled “Irrevocable Letter of
Credit No. PROV3-4077.” 	The Letter of Credit names the Bureau as beneficiary and
provides that it will be honored upon presentment by the Bureau. 	There are no other
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3 The parties agree that there were several amendments to the Letter of Credit, including
renumbering of the Letter of Credit’s reference number and automatic extension provisions, none
of which are relevant to this decision.
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conditions or qualifications to the Bureau’s drawing upon the Letter of Credit. Exhibit A to
Complaint; Exhibit 4 to Debtor’s Motion.3
On January 11, 1994, Debtor and PNC entered into an agreement titled “Irrevocable
Agreement of Trust for the Payment of Workers’ Compensation by Self Insurer.” Exhibit
2 to Debtor’s Motion (the “Trust Agreement”). 	The Trust Agreement provides, inter alia,
that (1) a trust fund is established “to provide a source of funds and to maintain adequate
reserves” for the payment of workers’ compensation claims and administrative expenses (the
“Trust Fund”); and (2) Debtor will deliver and maintain a certain amount of funds in the
Trust Fund. Id. § 2(a)-(b). PNC is the named trustee of the Trust Fund. Id. at 1.
Though the Bureau is not a party to the Trust Agreement, the agreement nevertheless
provides that:
The Bureau may direct that proceeds from security posted by the
Employer to secure its Claims Liability, such as surety bonds or
letters of credit, be deposited into a segregated account which is
a part of the Trust Fund. 	During a Default, the Bureau may
direct the use of such security proceeds to pay Claims Liability,
Claims Administration Expenses and Trust Operating Expenses
as outlined in this Agreement. If the Default is cured or if the
Bureau determines that the proceeds from the security are no
longer needed, the Bureau may direct that any remaining such
security proceeds held in the segregated account be distributed
as directed by the Bureau.
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4 The reason for the Bureau doing so is not apparent on the record, though Debtor asserts
that the Bureau drew upon the Letter of Credit pursuant to ¶ 4 of the Acknowledgment when
PNC refused to extend the Letter of Credit past its expiration date of March 31, 2002. It is
axiomatic that statements in briefs are not evidence. See Braden v. University of Pittsburgh, 477
F.2d 1, 6 (3d Cir.1973) (statements in briefs do not constitute record evidence unless admitted by
the opposing party); Westport Taxi Service, Inc. v. Westport Transit District (In re Westport
Transit District), 141 B.R. 543, 545 (Bankr. D. Conn.1992) (facts set forth solely in
memorandum of law do not constitute part of record on which findings of fact can be based); In
re Carter, 74 B.R. 613, 615 n. 3 (Bankr. E.D. Pa.1987) (factual assertions set forth in legal
memoranda are not in evidence and cannot be considered). See also In re Spring Ford Industries,
2003 WL 21785960, *1 n.4 (Bankr. E.D. Pa. 2003).
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Id. § 2(e). This provision does not specifically name the Letter of Credit issued by PNC for
the benefit of the Bureau, nor is the Letter of Credit defined or mentioned in any other
provision of the Trust Agreement, but 	the top of the Agreement does contain a header
reference to the Letter of Credit. Id. at 1.
In any case, the parties agree that on March 25, 2002 the Bureau drew on the Letter
of Credit to its full amount of one million dollars.4 Request for Admissions and Answers ¶ 9.
The Bureau deposited the proceeds from the Letter of Credit (the “Letter Proceeds”) into a
segregated account that is part of the Trust Fund. Affidavit of George Knehr, Chief of the
Bureau (“Knehr” and the “Knehr Affidavit”), Exhibit B to Joint Stipulation by the Parties
(“Joint Stip.”).
Debtor subsequently filed a voluntary petition on April 2, 2002 under Chapter 11 of
the Bankruptcy Code. 	PNC has filed and the Court has allowed a $1,000,000 unsecured
claim against the estate. To date, PNC has received distributions from the estate totaling
$528,890.08 on account of its claim.
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The instant adversary proceeding arises from the undisputed fact that the Bureau has
now paid all outstanding workers’ compensation claims and expenses from the Letter
Proceeds, leaving an unneeded excess of $440,000 (the “Excess”). Exhibit B to Joint Stip.
PNC filed this adversary proceeding, seeking a determination that the Excess is not property
of the estate and should be returned to PNC as a matter of law. Debtor has countered with
legal theories as to why the estate does indeed have a property interest in the Excess. The
Bureau makes no claim to the Excess. 	Pursuant to an “Escrow Agreement,” the Bureau
transferred the Excess to an escrow account at United Savings Bank pending the outcome of
this dispute. Exhibit A to Joint Stipulation.
DISCUSSION
Summary judgment, "shall be rendered forthwith if the pleadings, depositions,
answers to interrogatories and admissions on file, and affidavits, if any, show that there is no
genuine issue of material fact and that the moving party is entitled to judgment as a matter
of law." Fed.R.Civ.P. 56(c). 	Here, the parties agree that there are no disputed facts and that
resolution of this adversary proceeding turns upon issues of law.
The commencement of a bankruptcy case creates an estate comprised of all legal and
equitable interests of the debtor in property, wherever located, as of the commencement of
the case. 11 U.S.C. § 541(a)(1). The scope of this statutory provision is broad. H.R. Rep.
No. 595, 95th Cong., 1st Sess. 367-68 (1978); S.Rep.No. 989, 95th Cong., 2nd Sess. 82-83
(1978). “All conceivable interests of a debtor, even those that are future, nonpossessory,
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5 The Letter of Credit states that Pennsylvania law governs any dispute. 	Moreover, a
substantial contacts analysis would find Pennsylvania law applicable in this dispute involving a
letter of credit that is: (1) issued by a bank with offices in Pennsylvania, Complaint ¶ 8, (2) on
behalf of a Pennsylvania corporation which conducts business in the Commonwealth, Answer to
Complaint ¶ 9, (3) for the benefit of a Pennsylvania governmental agency. Exhibit A to
Complaint. See Tudor, 1991 WL 353443 at *4 n.15.
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contingent, speculative, or derivative, lie within the scope of § 541.” Bernstein v. Himel (In
re Himel), 190 B.R. 59, 61 (Bankr. W.D. Pa. 1995). The nature of the estate’s interest in
property is determined by reference to state law. Nobelman v. American Savings Bank, 508
U.S. 324 , 113 S.Ct. 2106 (1993); Butner v. U.S., 440 U.S. 48, 99 S.Ct. 914 (1979).
Accordingly, I turn to Pennsylvania law to ascertain the Debtor’s interest in the Excess Funds
as of the commencement of the case when the estate was created.5
PNC’s argument for summary judgment is based upon the nature of letters of credit,
which, under Pennsylvania law, has been aptly explained as follows:
A letter of credit is a promise by the issuer, frequently a bank, to the
beneficiary that it will honor drafts or other demands for payment upon
compliance with the conditions specified in the letter. 13 Pa.C.S.A. § 5103(a)
(Purdons 1984). There are commonly three parties to the transaction: (1) the
issuer--the party who extends the promise to pay; (2) the customer--the party
who requests issuance of the letter on his behalf; and (3) the beneficiary--the
party who is "entitled to draw or demand payment" on the letter. 	See: 13
Pa.C.S.A. § 5102. 	Among the three parties, there are three separate
contractual relationships: (1) the underlying contract between the customer and
the beneficiary which "may be for the purchase and sale of goods, the
construction of a building, the provision of services, or anything else which the
parties wish to exchange." (2) the relationship between the customer and the
issuer, pursuant to which the customer instructs the issuer to make out a letter
of credit in favor of a designated beneficiary; and (3) the document created
when the issuer carries out that instruction, i.e. the letter of credit itself.
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Tudor Development Group, Inc. v. U.S. Fidelity & Guar. Co., 1991 WL 353443, *4 (M.D.
Pa. Jan 07, 1991), aff’d 968 F.2d 357 (3d Cir. 1992). The “most salient feature” of the letter
of credit is the “independence principle,” i.e. that the letter is a commercial instrument
completely separate from the underlying contract between the customer and beneficiary.
Tudor, 968 F.2d at 360. The issuer’s obligation to the beneficiary is primary and does not
depend on any obligation or agreement between the customer and beneficiary.
PNC has cited to several bankruptcy decisions purporting to hold that, given the
independence principle, neither letters of credit nor their proceeds may constitute property
of the estate. In re Metro Communications, Inc., 115 B.R. 849, 854 (Bankr. W.D. Pa. 1990)
(payments made to creditors pursuant to letters of credit could not be avoided as preferential
transfer). See also Willis v. Celotex Corp., 978 F.2d 146, 148 n.3 (4th Cir.1992) (noting that
automatic stay would not bar third party from proceeding against letter of credit issued on
behalf of debtor); In re Air Conditioning, Inc., 845 F.2d 293,296 (11th Cir. 1988) (payments
made to creditors pursuant to letters of credit could not be avoided as preferential transfer);
In re Compton Corp., 831 F.2d 586, 589-90 (5th Cir. 1987) (automatic stay does not prohibit
a lender from drawing upon a letter of credit following the borrower's bankruptcy because
the lender is receiving property of the issuer, not property of the debtor's estate, and that the
independence principal is the cornerstone of letter of credit law); In re Green, 210 B.R. 556,
559 (Bankr. N.D. Ill. 1997) (court had no “related to”jurisdiction over dispute between
debtor’s creditor and bank that issued letter of credit on debtor’s behalf, as no estate property
was implicated).
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6 Because I find the Debtor’s argument under the Trust Agreement to be dispositive, I do
not address its alternative claim that the Workers’ Compensation Act grants a reversionary
interest.
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I agree that the independence principle would preclude Debtor from asserting an
interest in the Letter of Credit or its proceeds based solely upon that instrument. The Letter
of Credit is a contract is between PNC and the Bureau, separate and distinct from any
agreement to which the Debtor is a party. However, Debtor is not proceeding against the
Excess pursuant to the Letter of Credit. None of the cases cited by PNC involve proceeds
that, while traceable to a letter of credit, are subsequently placed in another vehicle that
arguably gives the estate an interest in the proceeds. That is exactly the case here. Though
the Bureau was not a party to the Trust Agreement and therefore not bound by it, there is no
factual dispute that the Bureau nevertheless placed the Letter Proceeds into the Trust Fund.
Knehr Aff. The Trust Fund is in turn is governed by the Trust Agreement, which Debtor
asserts gives the estate a reversionary interest in the Excess.6 I must therefore address the
Trust Agreement.
As noted earlier, the Trust Agreement is between Debtor and PNC, as Trustee, and
states that the purpose of the Trust Fund is to pay for workers’ compensation claims and
administrative expenses. 	Exhibit 2 to Debtors Motion, Preamble and § 2(a). The provision
dealing with the parties rights to the Trust Fund is § 19, aptly titled “Rights to Trust Fund.”
That provision states as follows:
It is understood and agreed that no person or corporation, except the parties
hereto, shall have any rights under this Agreement or in the Trust Principal
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7 See Preamble to Trust Agreement, Exhibit 2 to Debtor’s Motion at 1.
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except as provided in this Agreement. The Trust Fund shall not be subject to
the direct action or seizure by any creditor or claimant of the Employer under
any writ or proceeding at law or equity except as contemplated by and under
the Acts. The Employer shall not have right, title, interest, claim or demand
whatsoever in or to the Trust Principal other than the right to a proper
application and accounting of it by the Trustee and the right of reversion as
provided under sections 2(e), 13 and 14(c), all as set forth in this Agreement.
Exhibit 2 to Debtor’s Motion at 13. Under the plain language of this provision, PNC has no
rights to the Trust Principal. Indeed, as a creditor/claimant of Debtor, PNC’s ability to move
against the Trust Fund is specifically limited to actions contemplated under the “Acts,” which
are defined as the Pennsylvania Workers Compensation Act (77 P.S. §§ 1-1031) and the
Pennsylvania Occupational Disease Act (77 P.S. §§ 1201-1603). PNC cites to no provision
of these Acts which supports its claim to the Excess that is part of the Trust Fund.
Debtor (identified as Employer7), however, specifically has rights of reversion as
provided under §§ 2(e), 13, and 14 of the Trust Agreement. Exhibit 2 to Debtor’s Motion
at 13. Section 2(e) expressly addresses security posted by the Debtor, i.e the Letter of Credit.
This section allows the Bureau to place the proceeds from the Letter of Credit into a
“segregated account which is a part of the Trust Fund.” 	Id. at 5. 	The parties agree this
happened. The portion dealing with reversion states in relevant part: “If the Default is cured
or if the Bureau determines that the proceeds from the security are no longer needed, the
Bureau may direct that any remaining such security proceeds held in the segregated account
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be distributed as directed by the Bureau.” 	There is no question that the Bureau has
determined that the Letter Proceeds are no longer needed.
PNC is quick to point out that § 2(e) does not require that the Bureau must distribute
the security proceeds to the Debtor. 	PNC argues that this failure to identify a payee, in
conjunction with the requirement that security proceeds be placed in a segregated account,
leads to the conclusion that § 2(e) gives Debtor only a right to unused trust principal that it
contributed into the Trust Fund. Otherwise, argues PNC, the segregated account language
would not be needed.
There are two problems with PNC’s interpretation. First, § 2(e) is limited in scope
to the proceeds from the security. Second, while this section does not identify Debtor as the
party to whom the Bureau should distribute unneeded proceeds, § 19 specifically identifies
the reversionary interests of §2(e) as belonging to the Debtor. 	A contract should be
construed as a whole and effect given to all provisions. E.g., Williams v. Metzler, 132 F.3d
937, 947 (3d Cir.1997).
Sections 13 and 14 also provide for reversion of any “Trust Principal” to the Debtor
upon termination of the Trust Agreement or termination of Debtor’s self-insurance status.
“Trust Principal” is broadly defined in § 1 of the Trust Agreement: “All assets of the Trust
fund established by this Agreement including cash and all Authorized Investment held by the
Trustee in trust under this agreement.” Exhibit 2 to Debtor’s Motion at 3. As the parties
agree that the Letter Proceeds are part of the Trust Fund, the Excess falls under the purview
of this “all assets” definition.
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8 Such a result may, at first blush, seem to provide an inequitable windfall to Debtor
given that the clear purpose of the Letter of Credit was to fund workers’ compensation claims. It
cannot be forgotten, however, that PNC is a sophisticated entity. It could have protected itself in
any number of ways, including (1) inserting language in the Letter of Credit that limited the
Bureau’s draw to anticipated workers compensation claims and costs or requiring refund of any
excess; (2) inserting language in the Trust Agreement calling for its own right of reversion to
unused Letter Proceeds; or (3) contracting with Debtor for a security interest in other assets. It
did none of these things. “Courts have declined to use equity to grant rights to a [letter of credit]
issuer where the issuer could have contracted for those rights.” Lancaster Steel, 284 B.R. at 161
(citing In re Carley Capital Group, 119 B.R. 646, 650 (W.D. Wis.1990) (“[T]here is no equitable
reason to grant such additional rights to the plaintiffs in this case since they could have achieved
the same protection by contract.”); Briggs v. Goodyear Tire & Rubber Co., 79 F.Supp.2d 228,
237 (W.D.N.Y.1999) (“Settled law indicates that the equitable claims of unjust enrichment and
constructive trust are unavailable where plaintiffs have rights under a valid and enforceable
contract.”)).
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In sum, the Trust Agreement gives all reversionary rights to Debtor while expressly
prohibiting PNC from any rights to the Trust Fund save those contemplated by the Acts,
which PNC does not allege are applicable. Reversionary rights fall within § 541’s broad
definition of property of the estate. 	E.g. In re Wray, 258 B.R. 777, 785 n.8 (Bankr. D.
Idaho 2001); Matter of Hernando Healthcare, Inc., 157 B.R. 701, (Bankr. M.D. Fla.
1993)(“Section 541 of the Bankruptcy Code is broad enough to encompass Debtors’
equitable interest, i.e., a reversionary interest in this Fund, notwithstanding its inchoate
nature”).8 Thus, I agree with Debtor that the Excess is property of the estate.
On the contrary, PNC fails to cite any authority to support its own entitlement to the
Excess based upon the independence principle, which merely states that the Letter of Credit
is a separate agreement between PNC and the Bureau. Indeed, my own research leads to the
contrary holding. In Barclay’s Bank v. Dresdner Bank Lateinamerika, Inc. (In re Lancaster
Steel Co.), 284 B.R. 152 (S.D. Fla. 2002), the beneficiary/drawer of a letter of credit (Los
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Amigos) settled a dispute under the contract it had with the debtor (Lancaster Steel) resulting
in its returning funds to the debtor that were traceable to the letter of credit issued on debtor’s
behalf. 	The letter of credit issuer (Dresdner) sought return of those funds, offering the
rationale that PNC relies upon, i.e. that letters of credit and proceeds are not part of a debtor’s
estate, and citing similar cases to those relied upon by PNC. The district court rejected that
argument, holding:
While . . . traceable to the letter of credit funds, the funds were not, technically
speaking, “proceeds of the letter of credit.” Once Dresdner performed under
the letter of credit and gave the funds to Los Amigos, all obligations under the
letter of credit were satisfied. 	Dresdner can only look to Lancaster for
repayment under the letter of credit agreement – and therefore Dresdner must
be treated like any other creditor.
Id. at 160. 	Limiting its review only to the letter of credit itself under the independence
principle espoused by Dresdner, the district court found that nothing in that document
governed how much Los Amigos could draw down or what it could do with the proceeds.
Therefore, Los Amigos was free to return any excess to the debtor under their separate
contract.
Similarly, in Gluck v. Seaboard Surety Co. (In re Eastern Freight Ways, Inc.),
9 B.R. 653 (Bankr. S.D.N.Y. 1981), the letter of credit issuer, Chase Manhattan Bank
(“Chase”), sought to restrict the use of letter of credit proceeds it had issued to the
beneficiary on behalf of its customer. The court noted:
The provisions of the letter of credit dealt with the mechanics for draw down
and not with the purpose for which the proceeds were made available. This
aspect is dealt with by the underlying agreement between the beneficiary,
Seaboard and the account party, Eastern. If it were otherwise, the utility of a
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letter of credit would be frustrated and its unique nature in the world of
commerce obliterated . . . .
. . .
Thus, 	Chase 	comes 	out 	where 	it 	does 	because 	it 	has 	gone 	in 	on 	a
misapprehension of the operative agreement. The cases it cites deal with
challenges to the issuing banks' decision to make or withhold payment and not,
as here, with the use of proceeds by the beneficiary after payment.
Id. at 662-663. The Letter of Credit before me, like that before the Gluck court, simply deals
with the mechanics for draw down. Nothing in that contract speaks to either how the Letter
Proceeds are to be used or whether any amounts are to be returned. Therefore, once PNC
performed under the Letter of Credit and paid the funds to the Bureau, that contract was fully
executed and all obligations were satisfied. The Bureau was free to do whatever it wanted
with the Letter Proceeds, subject to any other contracts or statutory restrictions which might
bind it. 	Here it chose to place the Letter Proceeds into the Trust Fund, which in turn is
governed by the Trust Agreement. As noted, that agreement gives all rights of reversion to
Debtor.
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In re Spring Ford Industries, Inc. - Bankruptcy No. 02-15015DWS
Adversary No. 04-0479
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CONCLUSION
For the reasons stated herein, Debtor’s Motion shall be granted and PNC’s Motion
shall be denied. An order consistent with this Memorandum Opinion shall issue.
____________________________
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
Dated: 	April 19, 2005
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UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: 	Chapter 11
:
SPRING FORD INDUSTRIES, INC., 	: 	Bankruptcy No. 02-15015DWS
aka Spring Ford Knitting Company, Inc., 	:
:
Debtor. 	:
:
PNC BANK, National Association, 	: 	Adversary No. 04-0479
:
Plaintiff, 	:
:
v. 	:
:
SPRING FORD INDUSTRIES, INC., 	:
aka Spring Ford Knitting Company, Inc., 	:
COMMONWEALTH OF PENNSYLVANIA, 	:
DEPARTMENT OF LABOR & INDUSTRY, 	:
SELF-INSURANCE DIVISION, BUREAU OF 	:
WORKERS’ COMPENSATION [dsm’d 8/26/04] 	:
:
Defendants. 	:
ORDER
AND NOW, this 19th day of April 2005, upon consideration of the Motion of
Plaintiff PNC Bank, National Association (“PNC”), for Summary Judgment (“PNC’s
Motion”) 	and 	the 	response 	thereto 	and 	Cross-Motion 	for 	Summary 	Judgment 	of
Debtor/Defendant Spring Ford Industries, Inc. (“Debtor” and “Debtor’s Motion”), and for
the reasons stated in the accompanying Memorandum Opinion;
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In re Spring Ford Industries, Inc. - Bankruptcy No. 02-15015DWS
Adversary No. 04-0479
-17-
It is hereby ORDERED that PNC’s Motion is DENIED and Debtor’s Motion is
GRANTED. The sum of $437,000 currently held in escrow by United Savings Bank shall
be paid to Debtor.
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
Copies to:
James W. Hennessey, Esquire
Scott J. Freedman, Esquire
DILWORTH PAXSON LLP
1735 Market Street
Philadelphia, PA 19103
Paul B. Maschmeyer, Esquire
CIARDI, MASCHMEYER, KARALIS, P.C.
1900 Spruce Street
Philadelphia, PA 19103
Case 04-00479-dws Doc 31 Filed 04/19/05 Entered 04/19/05 15:39:45 Desc Main
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