Demczyk v. Mutual Life Insurance

OPINION

RYAN, Circuit Judge.

The plaintiff, Michael Demczyk, a trustee in bankruptcy, appeals the district court’s judgment that the trustee could not recover the proceeds of a letter of credit. The defendant, The Mutual Life Insurance Company of New York (MONY), a creditor, cross-appeals the district court’s order remanding to the bankruptcy court for a recalculation of MONY’s losses.

The trustee claims the district court erred in holding that the trustee had no right to recover a deposit made pursuant to contract, because the deposit was made via a standby letter of credit and that recovery…