IN RE AUGIE/RESTIVO BAKING CO., LTD.

No. 1302, Docket 88-5014.

860 F.2d 515 (1988)

In re AUGIE/RESTIVO BAKING COMPANY, LTD., Augie's Baking Company, Ltd., Debtors. UNION SAVINGS BANK, Appellant, v. AUGIE/RESTIVO BAKING COMPANY, LTD., Augie's Baking Company, Ltd., Manufacturers Hanover Trust Company, Ltd., Appellees.

United States Court of Appeals, Second Circuit.

Decided October 24, 1988.


Attorney(s) appearing for the Case

Robert S. Arbeit, Hauppauge, N.Y. (Steven G. Pinks, Jonathan W. Lipshie, Pinks, Brooks, Stern & Arbeit, Hauppauge, N.Y., of counsel), for appellant.

Brian M. Cogan, New York City (Daniel H. Golden, Sanford P. Rosen, Bonnie J. Schindel, Stroock & Stroock & Lavan, New York City, of counsel), for appellees and debtors.

Before WINTER and MINER, Circuit Judges, and BILLINGS, District Judge.


WINTER, Circuit Judge:

This appeal concerns the substantive consolidation of two bankruptcy proceedings. We reverse because the consolidation impairs the rights of certain creditors, principally Union Savings Bank ("Union"), which extended credit to Augie's Baking Company, Ltd. ("Augie's"), before Augie's had any relationship with Restivo Brothers Bakers, Inc. ("Restivo"). In turn, it also unfairly benefits later creditors of Restivo and Augie/Restivo, principally...

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