Ta Chong Bank (“the Bank”) filed a complaint wherein it asserted several claims against Hitachi High Technologies America, Inc. (“Hitachi”). Those claims were based on the Bank’s interest in the accounts receivable of a third party, CyberHome Entertainment, Inc. (“CyberHome”), pursuant to certain factoring agreements entered into by those entities. Although the factoring agreements provided that Hitachi was to pay the Bank, Hitachi made payment directly to CyberHome, several months before CyberHome filed for Chapter 7 bankruptcy.

The district court dismissed the Bank’s claims, reasoning that they were based solely on its interest in CyberHome’s accounts receivable, which the bankruptcy court had determined to be property of CyberHome’s bankruptcy estate. Read more