Opinion ID: 205909
Heading Depth: 3
Heading Rank: 4

Heading: The Second District Court Ruling

Text: The case came back to the district court, which ruled that the bankruptcy judge had misunderstood the “nar- row” scope of its first ruling. The district court stressed that its first holding was limited only to interpretation of the Interim Order regarding the payment of the “immediately” payable Commitment and Funding Fees. However, the district court stated that its ruling “did not require the Bankruptcy Court to find for LF under all circumstances.” It noted that the Notice Provision argument made in the bankruptcy court on remand had not been raised in the district court previously, because “there was initially no reason for Debtor to raise the notice argument, and I certainly never considered that argument in the context of this case.” Presented with the Notice Provision argument for the first time, the district court agreed with it, concluding that a breach by Arlington could only be effective after LF gave it notice and opportunity to cure. Because LF had not yet done so as of the time it repudiated the agreement on September 29, reasoned the district court, LF’s repudiation of those statements caused the first breach. It was only after October 20, when Arlington did not pay the fees after finally being given the requisite notice, that any breach cognizable under the Interim Order could have No. 09-3560 13 occurred. But by then, LF had already “walked away.” The district court reversed the bankruptcy court’s ruling and remanded with instructions to enter judgment in favor of Arlington. LF appealed to this court.