Arlington LF, LLC v. Arlington Hospitality, Inc.

WILLIAMS, Circuit Judge.

This is a bankruptcy case with a complicated factual and procedural background, but one that boils down to a simple question: who breached the parties’ post-petition financing agreement? Arlington Hospitality, Inc. and its subsidiaries (“Arlington”), operators of the AmeriHost hotel chain, filed for Chapter 11 bankruptcy in August .2005. Arlington needed funds in order to meet its obligations during the pendency of the bankruptcy proceeding, and to that end entered into a post-petition financing agreement on the eve of the bankruptcy filing with Arlington LF, LLC…