IN RE U.S. FLOW CORP.

No. 03-09863.

332 B.R. 792 (2005)

In re US FLOW CORPORATION, et al., Debtors.

United States Bankruptcy Court, W.D. Michigan.

October 29, 2005.


Attorney(s) appearing for the Case

Robert S. Hertzberg, Esq., Pepper Hamilton, LLP, Detroit, MI, for Unsecured Creditor Committee of US Flow Corp.

D. Tyler Nurnberg, Esq., Kaye Scholer, LLC, Chicago, IL.

Michael V. Maggio, Esq., Office of the United States Trustee, Grand Rapids, MI, U.S. Trustee.


OPINION REGARDING POSSIBLE DISGORGEMENT OF CARVE-OUT FUNDS

JAMES D. GREGG, Bankruptcy Judge.

I. ISSUE

This issue arises in one of those detestable administratively insolvent estates. Must court-appointed professionals in the chapter 11 case disgorge carve-out funds approved by the court pursuant to a DIP financing order? Is the carve-out defeasible in order to benefit other administrative claimants resulting from the conversion of...

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