Committee of Unsecured Creditors of Interstate Cigar Co. v. Interstate Distribution, Inc. (In Re Interstate Cigar Co.)
This Memorandum Decision addresses the Plaintiff's Motion for Summary Judgment regarding damages in an adversary proceeding. The Committee of Unsecured Creditors of Interstate Cigar Co., Inc. sued Interstate Distribution, Inc. and Congress Financial Corporation, alleging violations of Article 6 of the Uniform Commercial Code (Bulk Sales Law). A New York State Appellate Court had already determined Congress's liability for violating the Bulk Sales Law. The Bankruptcy Court, presided over by Judge Dorothy Eisenberg, was tasked with determining the appropriate damages. The court granted summary judgment in favor of the Plaintiff, concluding that Congress is liable for the value of the inventory and equipment transferred, fixing damages at $14,976,662.00. The decision also awarded prejudgment interest to compensate the Plaintiff for Congress's wrongful retention of asset value, with the specific interest rate to be determined in a subsequent hearing.