LG Appeals Bar On Claims In Circuit City Ch. 11

Law360, New York (January 20, 2010, 1:47 PM EST) -- LG Electronics USA Inc. is appealing a bankruptcy court's ruling allowing Circuit City Stores Inc. to withhold $50 million in administrative priority claims from several creditors pending recovery of preference payments.

Bankruptcy Judge Kevin R. Huennekens, of the U.S. Bankruptcy Court for the Eastern District of Virginia, erred when he let Circuit City temporarily bar the claims under U.S. Bankruptcy Code § 502(d), which should only apply to unsecured claims, according to a motion for leave to appeal filed Tuesday by LG.

LG is one of...
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