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WASHINGTON — The Supreme Court on Monday refused to consider a bankruptcy dispute between Wachovia Corp. and Eastman Kodak Co., a decision that allows the $30 million case to continue in lower federal courts. At issue is whether Kodak can press a claim against Wachovia stemming from the bankruptcy of retailer Wolf Camera Inc. of Atlanta. A federal district court ruled that a bankruptcy court’s proceedings settled the case and Kodak could not seek damages stemming in another court. A federal appeals court overruled the district court in July, finding that Kodak could not have obtained a full resolution of its claims in bankruptcy court and that its claims were not directly related to the bankruptcy proceeding. The fight stems from a $30 million loan Kodak made to Wolf Camera in March 2000, which required the approval of Wachovia, Wolf’s leading creditor. Kodak later claimed that Wachovia encouraged Kodak to make the loan but did not disclose that Wolf would be required to use the $30 million to repay some of its debts to Wachovia. Kodak also said that Wachovia withheld the severity of Wolf’s financial condition. Kodak sued Wachovia in New York, seeking $30 million in damages, while Wolf’s bankruptcy proceeding was settled in Georgia bankruptcy court. Wachovia argued that Kodak should have pursued its claims in bankruptcy court, and once the bankruptcy court reached a settlement between Wolf Camera and its creditors and resolved several other issues, further litigation should be barred. With the Supreme Court’s refusal to consider Wachovia’s appeal, Kodak’s case will now proceed in U.S. District Court in the Western District of New York. The case is Wachovia Bank N.A. v. Eastman Kodak Co. (06-526).

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