Peoples State Bank & Trust Co. v. Krug (In Re Krug)

MEMORANDUM OPINION AND ORDER

JULIE A. ROBINSON, Bankruptcy Judge.

This litigation arises out of a failed lending relationship between Harry Krug, a cattle rancher, and the Peoples State Bank & Trust Company of Ellinwood, Kansas (PSB). When Krug failed to make timely payments and his financing negotiations with another bank stalled, PSB repossessed most of the cattle and commenced foreclosure proceedings. Krug raised lender liability counterclaims and affirmative defenses in the foreclosure action, contending that PSB wrongfully repossessed and foreclosed, and negligently managed and cared for…