Opinion ID: 199934
Heading Depth: 3
Heading Rank: 1

Heading: Failure to object to the borrowing order

Text: 55 The bankruptcy court held that the government had waived its right of setoff by failing to object to the numerous requests for orders authorizing the Debtor to borrow from the Bank against its accounts receivable, including those due from the United States, on a secured and superpriority basis. Calore Express, 199 B.R. at 432. We disagree. If the orders authorizing the borrowing had set a date by which to assert setoff, the government's failure to object to the June 28, 1995, order, or to the orders and stipulations that followed, could conceivably have been inconsistent with an intent to assert any existing right of setoff. The orders did not do so; instead, they granted certain security interests and priority rights to Fleet. Even if those new rights were senior to the government's right of setoff, the orders would not have eliminated the right of setoff itself. They would merely have rendered that right junior to Fleet's new rights. We discuss below the bankruptcy court's conclusion as to seniority of interests. Regardless, the government's acquiescence in the order without objection did not waive its right of setoff. 56