Am.-Strevell, Inc. v. Termicold Corp. (In re Am.-Strevell, Inc.)
UNPUBLISHED
Unpaid warehouseman refused to deliver stored goods to chapter 11 debtor-in-possession where debtor's demand was not accompanied by an offer of adequate protection. The court held that, under Utah Code Ann. § 70A-7-209(4), warehouseman would not have lost its lien if it had delivered the goods to debtor in response to the demand, and did not lose the lien for refusing to release the goods, because the refusal was justified by debtor's failure to include a reasonable offer of adequate protection. The court noted that both common sense and prudent practice require the parties to attempt to negotiate adequate protection prior to requesting a court determination. Finally, the court found that the parties' contract, under which debtor relinquished possession and control of frozen turkeys to warehouseman, was clearly a bailment, rather than a lease, and was not avoidable under 11 U.S.C. § 545.