Case Study: In Re Flamingo

Law360, New York (August 17, 2011, 1:42 PM EDT) -- On July 25, 2011, the United States Court of Appeals for the Ninth Circuit in In re Flamingo 55 Inc., No. 10-15755, 2011 U.S. App. (9th Cir. July 25, 2011), held that a creditor who is a joint borrower, rather than a surety, guarantor or accommodation co-maker, was not entitled to subrogation under 11 U.S.C. § 509(a). 

The case involved partners/co-venturers in a development of real property, and, because the court held the creditor was a co-borrower with its own direct (and joint) liability, subrogation under...
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