Opinion ID: 2998766
Heading Depth: 2
Heading Rank: 3

Heading: The HSBC Matter

Text: The situation with HSBC is slightly different, although United is in default on the HSBC bonds as well. As of December 9, 2002, Chase (HSBC’s predecessor) had no outstanding requisitions due from United. On August 13, 2003, HSBC filed a precautionary motion for relief from the automatic stay so that it could apply setoff to United’s outstanding obligations and disburse the remaining money in the construction funds—about $37 million—to the bondholders. United consented to the release of all but approximately $5 million. The retained $5 million represents the amount that United contends it incurred in construction costs both before and after it filed for bankruptcy. United submitted a written reimbursement request for these costs to HSBC on September 30, 2004. The bankruptcy court entered an order allowing HSBC to offset and disburse the uncontested $32 million. HSBC voluntarily withdrew without prejudice its precautionary motion as it applied to the retained $5 million. On February 5, 2004, HSBC filed its second motion for relief from the automatic stay. In this motion, HSBC sought the release of the retained $5 million so that it could apply setoff and disburse these funds to the bondholders. After the bankruptcy court issued its opinion in the U.S. Bank proceedings, United and HSBC agreed that the reasoning of that opinion required this motion to be granted. On October 15, 2004, United and HSBC agreed to the entry of an order granting HSBC’s motion. United appealed. Since HSBC and United agreed that the bankrupcty’s court’s setoff reasoning in the U.S. Bank matter required that the remaining $5 million be offset as well, the district court affirmed the bankruptcy court’s order granting HSBC’s motion to lift the automatic stay. 8 Nos. 05-1752 & 05-1814