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Click here for the full text of this decision FACTS:Craig’s Stores of Texas won approval of a Chapter 11 bankruptcy reorganization plan in 1995. Eighteen months later, Craig’s filed an adversary proceeding against the Bank of Louisiana in bankruptcy court for the bank’s alleged failure to perform under a charge account contract. The bank filed its own adversary proceeding for an injunction enjoining Craig’s from disposing certain funds within its possession. The bank also sought to convert Craig’s bankruptcy into Chapter 7 liquidation and to recover money the bank says it was still owed. The bankruptcy court entered an agreed order requiring Craig’s to deposit $252,440 into the bankruptcy court’s registry while the case was resolved. After a ruling by the 5th U.S. Circuit Court of Appeals that the bankruptcy court lacked jurisdiction over the adversary proceeding between Craig’s and the bank, the bankruptcy court disbursed the registry funds to the bank. Now, Craig’s appeals the disbursement order. According to Craig’s, it deposited the money in an escrow account to reassure the bank that Craig’s would not transfer or dispose of its liquid funds before the bank could litigate and liquidate any underlying claim the bank might have against Craig’s. The bank, however, said it viewed the deposit as a concession that it owed the bank the amount deposited. The bank said that it thought the money was like a settlement and would be released back to Craig’s only in the event that Craig’s won a judgment against the bank. HOLDING:Reversed and remanded. The court found the agreed order supported the interpretation offered by Craig’s. There were no representations or concessions in the order that the money actually belonged to the bank. The agreement was instead neutral on who the ultimate recipient of the funds was to be. Likewise, the order authorized holding the deposited balance in the registry “pending further order of this Court.” Furthermore, the order expressly contemplated and permitted the bank to assert claims against Craig’s, claims that would be unnecessary if the order constituted a settlement. “According to the terms of the Agreed Order, ownership of the money in the court’s registry was at all times disputed and the funds were not deposited pursuant to a ‘settlement agreement.’. . . The funds could be disbursed to the Bank only if there has been a judgment on the merits in its favor by a court of competent jurisdiction. After the underlying litigation was dismissed, however, the bank never filed an independent lawsuit in state or federal court to adjudicate any contractual breach. Craig’s may well be liable to the Bank for contract damages; unfortunately for the Bank, no such decision had been made in the course of litigation before a court possessing jurisdiction.” The court remanded with instructions that the funds be disbursed to Craig’s. OPINION:Per curiam; Reavley, Jones and Dennis, JJ. CONCURRENCE AND DISSENT: James L. Dennis, Circuit Judge. Judge Dennis agreed that the order should be reversed and remanded but dissented from the majority’s instruction to disburse the money to Craig’s. “I disagree with the majority’s peremptory instruction that the district court must distribute the funds to one of the parties without making a determination of whether that party is the rightful owner. The district court should, instead, be instructed to determine rightful ownership and to distribute the funds accordingly pursuant to Federal Rule of Civil Procedure 67 and 28 U.S.C. 2041 and 2042.”

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