Universal Bonding Insurance v. Gittens & Sprinkle Enterprises, Inc.

OPINION OF THE COURT

GARTH, Circuit Judge:

Gittens and Sprinkle Enterprises, Inc. (“Gittens”), a contractor, filed for bankruptcy protection and attempted, as debtor in possession, to collect outstanding contract balances due from state, municipal and federal agencies, for the purposes of reorganizing and using such funds as capital in new ventures. Gittens’ surety, Universal Bonding Insurance Company (“Universal”), objected and argued that these balances constituted statutory or equitable trusts for the benefit of laborers and mate-rialmen and therefore could not become part of Gittens’…