World Commc'ns, Inc. v. Direct Mktg. Guar. Trust (In re World Commc'ns, Inc.)
APPEAL
Unpublished
The district court affirmed the bankruptcy court's finding that an escrow account set up by the defendant was property of debtor's estate under 11 U.S.C. § 541(a)(1). However, the court remanded for the bankruptcy court's consideration of two conditions required for turnover under 11 U.S.C. § 542, which are (1) whether defendant has a security interest in the account that warrants adequate protection and, (2) if so, whether that secured interest could be adequately protected by the trustee. The district court also determined it could not affirm the bankruptcy court finding that the parties could not orally modify their written contract, because oral modifications to written contracts can be enforced under certain circumstances. Therefore, the case was also remanded for consideration of whether the parties had made an enforceable oral modification, regarding the amount of proceeds that defendant could withhold in the escrow account, to their agreement.