In re Argon Credit, LLC

MEMORANDUM OPINION

DEBORAH L. THORNE, UNITED .STATES BANKRUPTCY JUDGE

Before the court is the disputed election of chapter 7 trustee Patrick J. O’Malley. Under 11 U.S.C. § 702(b), Fund Recovery Services, LLC elected O’Malley over the objections of the interim trustee and two insider creditors. As explained below, the court finds that Fund Recovery Sendees was ineligible to vote because its interest is materially adverse to other creditors’ interests.

Factual Background1

Argon X, LLC (“Argon X”) and Argon Credit, LLC (“Argon Credit”) were in the business of making near-prime consumer loans. The…