Opinion ID: 2998766
Heading Depth: 2
Heading Rank: 2

Heading: HSBC Matter

Text: The final matter before the Court is HSBC’s motion for relief from the automatic stay. The relief requested would 22 Nos. 05-1752 & 05-1814 allow HSBC to distribute approximately $5 million in retained funds to bondholders. We review a bankruptcy court’s decision to grant relief from an automatic stay for an abuse of discretion. Meyer Med. Physicians Group, Ltd., 385 F.3d at 1041. HSBC argues that because United submitted its written reimbursement request after it filed for bankruptcy (on September 30, 2004), those funds are subject to setoff. Accordingly, HSBC argues that the bankruptcy court properly granted its motion to lift the automatic stay and the district court properly affirmed. HSBC and United have stipulated that their respective claims succeed or fail with the setoff issue. United submitted the reimbursement request at issue here postpetition for work it completed prepetition. United has no colorable claim that it was entitled to this money before entering bankruptcy. As we have determined that reimbursement requests submitted after bankruptcy are subject to setoff, we conclude that the HSBC motion was properly granted. Moreover, since we conclude that HSBC has setoff rights, we find it unnecessary to address HSBC’s recoupment argument. Thus, we affirm the Bankruptcy Court and District Court orders granting relief from the automatic stay.