Beal Bank S.S.B. v. Medway Ranch, Inc.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

This bankruptcy appeal involves two notes that allowed for payment on one to count also towards the other in the absence of default on the first. We are persuaded that there was a default on the first note that was not validly waived. We conclude then that the second note has not been paid. We REVERSE the contrary decision by the district court and REMAND for further proceedings.

I

The two contested notes were issued in the first Chapter 11 bankruptcy of Medway Ranch and at issue in its second bankruptcy. In the first bankruptcy, the Ranch executed and…