Opinion ID: 47671
Heading Depth: 3
Heading Rank: 1

Heading: Destruction of Business

Text: All Trac first contends that it proved TAB caused the demise of its trucking business by wrongfully withholding the proceeds of its accounts receivable, thereby leaving All Trac unable to make adequate protection payments to its secured creditors. It argues that the bankruptcy court erred in making several factual and legal conclusions and in using a hypothetical 5 analysis to determine what would have happened if TAB had not withheld the proceeds. Although All Trac contends it raises a legal question, the bankruptcy court made a fact finding about All Trac’s failure of proof that this court reviews for clear error. We agree, as All Trac contends, that the bankruptcy judge improperly used a hypothetical to determine what may have happened had All Trac had access to the funds improperly withheld by TAB. This error, however, is harmless, because the court also found that All Trac had not shown how it would have been able to become profitable, in light of its prebankruptcy financial condition, which could not be attributed to TAB. Significant evidence from financial experts supported the finding that All Trac was not financially sound even apart from any actions by TAB. The court further found that All Trac had not shown why, after the relationship with TAB ceased, All Trac still could not pay the costs of its continuing operations. Although All Trac asserted that TAB’s actions affected it cumulatively, there was no evidence that any customers limited or stopped doing business with it because of TAB’s actions. At most, the company proved that TAB caused the loss of one driver. Thus, even absent the improper hypothetical, the finding that All Trac failed to prove TAB caused the destruction of All Trac’s entire business is not clearly erroneous.