Structure Ace LLC

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE:
STRUCTURE ACE, LLC,
DEBTOR.
§ CASE NO: 25-11911
§
§ CHAPTER 7
§
§ SECTION A
MEMORANDUM OPINION AND ORDER
Before the Court are cross-motions for summary judgment:
(i) the Motion for Summary Judgment (the “Purchasers’ MSJ”), [ECF Doc. 168], filed
by Property Claim Relief, LLC (“PCR”), Insured Advocacy Group, LLC (“IAG”),
and Insured Advocacy Group II, LLC (“IAG 2”) (collectively, the “Purchasers”);
and
(ii) the Trustee’s Motion for Summary Judgment Against Property Claim Relief, LLC
(the “Trustee’s MSJ”), [ECF Doc. 169], filed by Greta M. Brouphy, the appointed
Chapter 7 Trustee (the “Trustee”).
Both motions are opposed. [ECF Docs. 171 & 172]. Both parties submitted statements of
uncontested material facts, [ECF Docs. 168-1 & 169-1],1 as well as reply briefs in support of their
respective motions for summary judgment, [ECF Docs. 174 & 175].
Also before the Court is the Trustee’s objection to PCR’s proof claim (the “Claim
Objection”). [ECF Doc. 121].
For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART
the Purchasers’ MSJ; GRANTS IN PART and DENIES IN PART the Trustee’s MSJ; and
SUSTAINS IN PART and OVERRULES IN PART the Claim Objection.
1 The Purchasers filed a response to the Trustee’s statement of uncontested material facts. [ECF
Doc. 172-1]. The Trustee’s opposition to the Purchasers’ MSJ includes an objection to a number of
statements in the Claimants’ statement of facts as constituting legal conclusions and/or as unsupported.
[ECF Doc. 171].
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JURISDICTION AND VENUE
This Court has jurisdiction to grant the relief provided for herein pursuant to 28 U.S.C.
§ 1334. The matters presently before the Court constitute core proceedings that this Court may
hear and determine on a final basis under 28 U.S.C. § 157(b)(2)(B). Venue is proper pursuant to
28 U.S.C. §§ 1408 and 1409.
PROCEDURAL HISTORY
In the aftermath of Hurricane Ida in October 2021, the Debtor contracted with a number of
property owners to repair property damage caused by the storm. In connection with the repair
contracts, each property owner entered into an agreement purporting to, among other things, assign
its post-loss insurance benefits to the Debtor. On August 22, 2022, and May 12, 2023, the Debtor
entered into master purchase agreements with IAG and PCR, respectively, to provide for the sale
and assignment of the Debtor’s rights under the repair contracts as well as the proceeds payable
under the property owners’ insurance policies. Pursuant to the master purchase agreements, the
Debtor executed purchase addenda with each Purchaser evidencing the sale of specific portfolios
of invoices. Each purchase addendum provides that the Purchaser has the right to disburse to itself
all funds received under that portfolio until it has recovered the purchase price of the portfolio plus
a factor fee, before remitting any surplus to the Debtor.
On August 28, 2025, the Debtor filed a voluntary petition for bankruptcy relief under
Subchapter V of Chapter 11 of the Bankruptcy Code. [ECF Doc. 1]. Each of the Purchasers filed
a proof of claim. [Claim Nos. 17–19]. On December 1, 2025, the Court entered an Order
converting the case to one under Chapter 7. [ECF Doc. 61]. Greta Brouphy was appointed to
serve as the Chapter 7 Trustee. [ECF Doc. 66].
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The Court scheduled an evidentiary hearing on September 10, 2026, [ECF Docs. 130 &
139], to resolve several contested matters related to the respective rights of the Debtor and the
Purchasers under the master purchase agreements and purchase addenda (together, the “Contested
Matters”):
First, on March 25, 2026, PCR filed a motion to lift the stay to exercise its rights of recovery
under claims it alleges it purchased related to work performed by the Debtor for the 1750 St.
Charles Avenue Homeowners’ Association (the “Lift-Stay Motion”). [ECF Doc. 115]. At the
hearing on the Lift-Stay Motion, the Trustee stipulated that the purchase agreement with PCR
constituted a true sale of the Debtor’s accounts receivable related to that particular project. [ECF
Doc. 124]. The Court entered an Order granting in part the Lift-Stay Motion and scheduling an
evidentiary hearing to hear evidence on issues relating to the allocation of payments. [ECF Doc.
130].
Second, on April 13, 2026, the Trustee filed an objection to PCR’s proof of claim (the
“Claim Objection”). [ECF Doc. 121].2 PCR’s proof of claim asserts a secured claim in the amount
of $13,379,373.51 for “Breach of Contracts/Purchase of Accounts” under its master purchase
agreement and purchase addenda with the Debtor. [Claim No. 19-1]. The Claim Objection argues
that PCR has no claim against the estate because, to the extent that PCR’s master purchase
agreement and purchase addenda are valid at all,3 they constituted true sales without recourse.
Finally, April 24, 2026, and May 13, 2026, the Trustee filed motions to compromise claims
(“9019 Motions”) against two of the Debtor’s customers: Historic St. Peter African Methodist
2 The Trustee has yet to object to the proofs of claim filed by IAG and IAG 2. [Claim Nos. 17-1 and
18-1].
3 The Claim Objection asserts that PCR had not proven that the sales were valid because PCR had
not yet produced the insurance assignment agreements executed by the Debtor’s customers.
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Church (“Saint Peter”) and Greater Allen Chapel of A.M.E. Church (“Greater Allen”). [ECF Docs.
125 & 132]. The Purchasers filed oppositions to the 9019 Motions, asserting that the Debtor had
sold its invoices relating to Saint Peter and Greater Allen to PCR and IAG 2, respectively, under
the master purchase agreements and purchase addenda and that the Trustee lacks the authority to
settle non-estate claims. [ECF Docs. 134 & 144].
The parties filed the instant motions for summary judgment pursuant to the Court’s
Scheduling Orders. In sum, the Purchasers’ MSJ asks the Court to find that, pursuant to the master
purchase agreements and purchase addenda: (1) the Purchasers are the owners of the Debtor’s
invoices and of any claim arising therefrom, with exclusive authority to pursue collection, (2) the
Purchasers are the owners of insurance benefits that were assigned to the Debtor prior to August
1, 2023, (3) the invalidity of any insurance assignment does not affect the Purchasers’ other rights
under the master purchase agreements, and (4) the Trustee is not entitled to any distribution on
account of the purchased invoices until the Purchasers have collected all amounts they are entitled
to across all portfolios.
The Trustee’s MSJ argues that: (1) all of the insurance assignments executed by the
Debtor’s customers in favor of the Debtor are null and void, either because of the passage of section
22:1275 of the Louisiana Revised Statutes, effective August 1, 2023, or because of anti-assignment
clauses contained within the customers’ insurance policies, (2) because the insurance assignments
are void, the master purchase agreement between PCR and the Debtor is unenforceable in its
entirety, and (3) to the extent the sales of invoices are valid, the estate is entitled to payment of the
“refundable reserve” on a per-portfolio basis.
Those issues impact the resolution of each of the Contested Matters. Before ruling on the
9019 Motions and the Claim Objection, the Court must determine whether the Debtor’s invoices,
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and the claims against the property owners arising thereunder, are property of the estate or are
owned by the Purchasers.4 Additionally, the outstanding issues in the Lift-Stay Motion regarding
allocation of any amounts recovered in PCR’s litigation against the 1750 Saint Charles Avenue
Homeowners’ Association depend on interpreting the payment terms under the purchase addenda.
UNDISPUTED FACTS
The following material facts are either uncontested, not the subject of a genuine dispute, or
are subject to judicial notice by this Court:
The Debtor entered into a number of contracts for remediation and repair of properties
following Hurricane Ida (each a “Repair Contract”). [ECF Doc. 169-1, ¶ 1 & ECF Doc. 172-1].
In connection with each Repair Contract, the Debtor entered a Conditional Assignment,
Subrogation and Irrevocable Direction To Pay & Grant of Lien on Insurance Proceeds Accessory
Agreement (each a “Subrogation & Assignment Agreement”) with each property owner (each a
“Customer”). [ECF Doc. 168-1, ¶¶ 15, 34, & 67; ECF Doc. 169-1, ¶ 2]. The Subrogation &
Assignment Agreements purported to, among other things, assign post-loss insurance benefits to
the Debtor (the “Assignments” and each an “Assignment”). [ECF Doc. 169-2].5 Each insurance
4 Counsel for PCR has indicated that PCR only intends to maintain its proof of claim in the event
that the Court finds that PCR is not the owner of the invoices. See [ECF Doc. 168, at 32–33].
5 The Sale & Assignment Agreement between the Debtor and Saint Peter provides, in relevant part:
Property owner hereby (as more specifically addressed below) irrevocably, albeit
conditionally, assigns and unconditionally contractually subrogates to Service Provider
(collectively, “Assignment and Subrogation Rights”) any and all of Property Owner’s
post-loss rights, benefits, title, interests, and proceeds to which Property Owner may be
entitled under Property Owner’s property and casualty insurance policy (hereinafter
“Policy”) more specifically described above up to the total amount of all monetary
obligations owing by Property Owner to the Service Provider under and in connection with
the Principal Agreement.
[ECF Doc. 169-2, at 3].
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policy that was subject to a Subrogation & Assignment Agreement (each an “Insurance Policy”)
contained an anti-assignment provision. [ECF Doc. 169-1, ¶ 3; ECF Doc. 172-1].
On August 22, 2022, the Debtor entered into a First Party Claims Non-Recourse Sale and
Assignment Agreement with IAG (the “IAG Purchase Agreement”). [ECF Doc. 168-1; ECF Doc.
171; ECF Doc. 168-3]. On May 12, 2023, Debtor entered into an identical sale and assignment
agreement with PCR (the “PCR Purchase Agreement” and, together with the IAG Purchase
Agreement, the “Master Purchase Agreements”). [ECF Docs. 168-10 & 169-5]. The Master
Purchase Agreements granted each Purchaser the option to purchase the Debtor’s accounts
receivable, together with the insurance benefits that the Customers had purportedly assigned to the
Debtor.6
Pursuant to the Master Purchase Agreements, the Purchasers entered into a number of
purchase addenda with the Debtor (“Purchase Addenda” and each a “Purchase Addendum”), with
each Purchase Addendum providing for the sale of a specific portfolio of the Debtor’s invoices.
[ECF Docs. 168-12 & 169-4]. Each Purchase Addendum lists a “Purchase Price,” computed as
50% of the “Adjusted Portfolio Receivable,” and a “Factor Fee” of 20%. [ECF Docs. 168-12].
The PCR Purchase Agreement was amended on October 2, 2024, to increase the Factor Fee from
20% to 27.5%. [ECF Doc. 168-1, ¶ 62; ECF Docs. 168-11 & 171]. The Purchase Addenda provide
6 Section 2.1 of the Master Purchase Agreements provides:
Buyer shall have the option, in its sole and absolute discretion, to purchase one or more of
the Accounts and Account Balances (together with the applicable AOCs) listed on the
Schedule of Accounts attached hereto as Exhibit B from Seller (the “Selected Accounts”
and each a “Selected Account”), and Seller agrees to sell all Rights, title and interest in
and to the Selected Accounts on the Closing Date. The Selected Accounts, Account
Balances and related AOCs, will be sold to Buyer by Seller free and clear of any lien,
encumbrance, security interest, or other restrictions of any kind or type.
[ECF Doc. 168-10, § 2.1].
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that the Purchasers will collect the Purchase Price and the Factor Fee and remit any “Refundable
Reserve” to the Debtor. [ECF Docs. 168-12 & 169-4].
PCR executed Purchase Addenda evidencing the sale of invoices for the following
Customers: (a) Bethel African Methodist Episcopal Church, (b) 1750 Saint Charles Condominium
Homeowners Association, Inc., (c) Union Bethel African Methodist Episcopal Church, (d) Con
El, Inc. & Susca Inc. DBA La Casa Del Sol; Miss Ellies Kitchen, Inc., (e) Saint Peter, and (f)
McMillian’s First Steps Community Development Center. [ECF Doc. 168-1, ¶ 64; ECF Doc. 171].
IAG and IAG 2 each executed a number of Purchase Addenda pursuant to the IAG
Purchase Agreement, including, as is relevant here, to provide for IAG 2’s purchase of the Debtor’s
invoices relating to Greater Allen. [ECF Doc. 168-1, ¶ 30; ECF Doc. 171].
Effective August 1, 2023, section 22:1275 of the Louisiana Revised Statutes prohibits the
assignment of post-loss insurance benefits under a residential or commercial property insurance
policy. [ECF Doc. 168-1, ¶ 66; ECF Doc. 171]. Both Saint Peter and Greater Allen executed
Assignments after August 1, 2023. [ECF Doc. 168-1, ¶¶ 41 & 74; ECF Docs. 169-2 & 169-3].
DISCUSSION
A. Summary Judgment Standard
A court grants summary judgment when the pleadings, discovery responses, and affidavits
show no genuine dispute as to any material fact and the evidence entitles the movant to judgment
as a matter of law. See FED. R. CIV. P. 56(a); FED R. BANKR. P. 7056; Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). No genuine dispute exists when “a rational trier of fact could not find
for the [nonmovant] based upon the record evidence before the court.” James by James v. Sadler,
909 F.2d 834, 837 (5th Cir. 1990) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986)). In deciding a motion for summary judgment, “the judge’s function is not
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[herself] to weigh the evidence and determine the truth of the matter but to determine whether
there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In
so doing, the Court views the facts and evidence in the light most favorable to the non-moving
party at all times. See Campo v. Allstate Ins. Co., 562 F.3d 751, 754 (5th Cir. 2009). “The
interpretation and enforcement of a contract are questions of law, not fact, and so are appropriately
dealt with at summary judgment.” Anadarko Petroleum Corp. v. Alt. Env’t Solutions, Inc., 169
F.4th 542, 548 (5th Cir. 2026) (citations omitted); see also Tekelec, Inc. v. Verint Sys., Inc., 708
F.3d 658, 664 (5th Cir. 2013) (“The interpretation of an unambiguous contract is a legal question
that can be properly decided on summary judgment.”).
A party moving for summary judgment bears the initial burden of demonstrating the
absence of a genuine dispute of material fact. See Celotex, 477 U.S. at 317. Where the moving
party also bears the burden of proof at trial, it must “come forward with evidence which would
entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int’l Shortstop, Inc. v.
Rally’s Inc., 939 F.2d 1257, 1264–65 (5th Cir. 1991) (internal quotations omitted). Where the
nonmoving party has the burden of proof at trial for a claim or defense, the moving party can show
that it is entitled to summary judgment by pointing to the absence of evidence supporting the
nonmoving party’s case. See Celotex, 477 U.S. at 325.
“When parties file cross-motions for summary judgment, [courts] review each party’s
motion independently, viewing the evidence and inferences in the light most favorable to the
nonmoving party.” Cooley v. Hous. Auth. of Slidell, 747 F.3d 295, 298 (5th Cir. 2014) (internal
quotations and citation omitted).
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B. Any Unenforceable Provisions Regarding the Assignment of Insurance
Benefits Are Severable from the Remaining Terms of the Master Purchase
Agreements and the Purchase Addenda.
Section 22:1275 of the Louisiana Revised Statutes provides, in relevant part: “A person
shall not solicit or accept an assignment, in whole or in part, of any post-loss insurance benefit
under a residential or commercial property insurance policy. An assignment is against public
policy and is null and void.” LA. REV. STAT. § 22:1275(B)(1). That statute only affects the validity
of post-loss insurance assignments dated on or after August 1, 2023. See Creamer Bros. Inc. v.
Gen. Cas. Co. of Wis., No. CV 22-6110, 2024 WL 3013664, at *4 (W.D. La. June 14, 2024)
(finding that retroactive application of section 22:1275 “would likely violate both the United States
Constitution and the Louisiana Constitution as well”). The Trustee takes a broader view,
contending that each Assignment purportedly sold to the Purchasers is invalid––regardless of when
executed––due to the anti-assignment language in each Insurance Policy. Because the Court finds
that the sale and assignment of insurance proceeds under the Master Purchase Agreements is
severable from the sale and assignment of the underlying invoices, it is not necessary to determine
the extent to which the Purchasers acquired an interest in post-loss benefits under the Insurance
Policies.
The standard for determining when an invalid contractual provision is severable is the same
whether Texas law or Louisiana law applies.7 Under Texas law, “[a]n illegal or unconscionable
provision of a contract may generally be severed so long as it does not constitute the essential
7 Although the parties selected Texas law to govern the Master Purchase Agreements, the disputed
contract terms involve the attempted assignment of benefits under insurance policies issued in Louisiana.
This leads to an apparent choice-of-law issue. Because the Court perceives no material differences between
the laws of Texas and Louisiana in regard to contract severability, however, a conflicts analysis is not
necessary. See Schneider Nat. Transp. v. Ford Motor Co., 280 F.3d 532, 536 (5th Cir. 2002) (“If the laws
of the states do not conflict, then no choice of law analysis is necessary.” (quotation marks and citation
omitted)).
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purpose of the agreement.” In re Poly-Am., L.P., 262 S.W.3d 337, 360 (Tex. 2008) (citations
omitted). “Whether or not the invalidity of a particular provision affects the rest of the contract
depends upon whether the remaining provisions are independent or mutually dependent promises,
which courts determine by looking to the language of the contract itself.” Id. (citations omitted).
“Where each covenant is such an indispensable part of what both parties intended that the contract
would not have been made without the covenant, they are mutual conditions and dependent, in the
absence of clear indications to the contrary.” John R. Ray & Sons, Inc. v. Stroman, 923 S.W.2d
80, 86 (Tex. App.––Houston 1996), writ denied (Feb. 21, 1997). The Louisiana Legislature has
codified essentially the same rule: “Nullity of a provision does not render the whole contract null
unless, from the nature of the provision or the intention of the parties, it can be presumed that the
contract would not have been made without the null provision.” LA. CIV. CODE art. 2034.
Based on the language of the Master Purchase Agreements and Purchase Addenda, the
Court finds that the assignments of insurance benefits do not constitute the essential purpose of
the contracts. First, each Purchase Agreement contains a severability clause.8 Under both Texas
and Louisiana law, a severability clause is strong evidence that the parties intend to preserve their
bargain in the event that one or more provisions of the agreement are found to be invalid. See,
8 Section 9.8 of the Master Purchase Agreements provides:
9.8 Severability. If, but only to the extent that, this Agreement or any provision of
this Agreement is declared or found to be unenforceable, voidable or void, for any reason,
including but not limited to unconscionability, lack of consideration, or mistake of fact or
law, so that either Seller or Buyer would be relieved of all obligations arising under such
provision, it is the agreement of Seller and Buyer that this Agreement shall be deemed
amended by modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent. If such amendment is not possible, another
provision that is legal and enforceable and achieves the same objective shall be substituted
therefor. If the remainder of this Agreement is not affected by such declaration or finding
and is capable of substantial performance by both Seller and Buyer, then the remainder
shall be enforced to the extent permitted by law.
[ECF Doc. 168-10, § 9.8].
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e.g., Hudson v. City of Bossier City, 2005-0351, p. 20 (La. 4/17/06), 930 So. 2d 881, 894 (“[T]he
existence of a severability provision in a contract, while not always regarded as conclusive, will
generally be given considerable weight.” (internal quotation marks and citation omitted)); Vince
Poscente Int’l, Inc. v. Compass Bank, 460 S.W.3d 211, 219 (Tex. App.––Dallas 2015) (“Especially
where the contract itself expressly contemplates and provides for the severance of an illegal
provision, the valid portion of the contract may be enforced.”).
Second, the essential purpose of the Master Purchase Agreements and Purchase Addenda
is to provide for the sale of the Debtor’s receivables at a discount––or, in other words, to factor the
Debtor’s receivables. The Purchasers provided liquidity for the Debtor by advancing a cash
purchase price and receive a premium, in the form of a Factor Fee, for taking on the risk and delay
of collection. That purpose can be achieved as long as the Purchasers have the right to collect
payment on the invoices, regardless of whether they are entitled to direct payment of post-loss
benefits under the Assignments.
The Master Purchase Agreements provide for the “sale, transfer and assignment to [the
Purchasers] of all Right, title and interest of [the Debtor] in the Selected Accounts, Account
Balances, and the related AOCs . . . .” [ECF Doc. 168-10, § 3.1.18]. Thus, the Master Purchase
Agreements contemplate that the Purchasers will acquire all of the Debtor’s rights to payment
under the Repair Contracts, including the Debtor’s rights of collection against the Customers.9
Neither party argues that the invalidity of some or all Assignments extinguishes the Customers’
9 Indeed, the Debtor specifically represents and warrants in the Master Purchase Agreements that it
“has all necessary legal and contractual Rights to pursue collection on all Accounts and against all
Customers . . . .” [ECF Doc. 168-10, § 3.1.19].
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liability to the Debtor under the Repair Contracts.10 To the extent that the Purchasers cannot
recover from the Insurers directly via the Assignments, they can still obtain the benefit of their
bargain by taking collection actions against the Customers. Although the Assignments might
provide additional security of payment, the right to payment arises and exists independently under
the Repair Contracts and the provisions of the Master Purchase Agreements effecting the sale of
“Accounts” and “Account Balances.”11
Accordingly, the Court finds that any unlawful assignment provisions did not constitute an
indispensable part of the bargain between the parties. Those provisions may therefore be severed
under Section 9.8 of the Master Purchase Agreements, leaving the remaining provisions of the
Master Purchase Agreements and Purchase Addenda enforceable.12
C. Genuine Issues of Material Fact Exist as to Payment of the Refundable
Reserve.
The final issue before the Court is whether the estate is entitled to receive the Refundable
Reserve on a per-portfolio basis once PCR has collected the Purchase Price and Factor Fee for any
one portfolio.
10 See [ECF Doc. 169, at 5 (“By the plain letter of the law, the Assignments are null and void.
However, the underlying Roof Contracts were not rendered null and void and the Debtor and certain
subcontractors performed work for St. Peter and Greater Allen.”)].
11 Texas courts have found that contractual terms that provide additional security of payment are
severable from the underlying payment obligation. See, e.g., Panasonic Co., Div. of Matsushita Electr.
Corp. of Am., 903 F.2d 1039, 1041–42 (5th Cir. 1990) (holding that a homestead waiver was not an essential
feature of the guarantee because it merely provided additional security for the guarantor’s obligation to
repay the debt); Vince Poscente Int’l, Inc. v. Compass Bank, 460 S.W. 211, 218–19 (Tex. App.––Dallas
2015) (same); Panasonic, 903 F.2d at 1042 (“An otherwise lawful promissory note is not rendered
unenforceable simply because the security given on the note is unenforceable.” (citation omitted)).
12 Additionally, the Court notes that the Trustee asserts PCR knew the Assignments violated anti-
assignment clauses in the Insurance Policies, [ECF Doc. 172, at 9], while PCR alleges that it was aware of
the enactment of section 22:1275 and knew the Assignments were invalid, [ECF Doc. 168-1, ¶¶ 74–75].
Under either party’s theory, PCR chose to enter into the Purchase Addenda despite knowing that the
Assignments were unenforceable, which belies the notion that the parties would not have entered into the
contracts without the Assignment provisions.
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Each Purchase Addendum provides:
Upon receipt of any cash funds from this Portfolio, or any future Portfolio, that are
collected by Buyer or received by Seller or Seller’s attorney and delivered to Buyer
(“Payment Collected”), Buyer shall: (a) deduct and disburse all sums collected
from any Payment Collected until the Purchase Price and the Factor Fee of the
entire Portfolio are collected in full; and (b) so long as Seller is in full compliance
with the terms and conditions of the Agreement on this and all other Portfolios,
disburse to Seller the remaining balance that is collected from each portfolio (the
“Refundable Reserve”).
[ECF Doc. 168-12, at 1]. PCR argues that, if the Debtor is in breach of the PCR Purchase
Agreement or any of PCR’s Purchase Addenda, the Refundable Reserve is payable only once PCR
has collected the Purchase Price and Factor Fee across all of its portfolios. [ECF Doc. 168, at 12,
31–32]. The Trustee concedes that “the Addenda contemplate that Debtor must be in compliance
with all portfolios” to receive the Refundable Reserve but denies that the agreement contemplates
pooled collection rights or cross-collateralization. [ECF Doc. 171, at 5–6].
There is no reasonable interpretation of the Purchase Addenda that would entitle the Debtor
to payment of the Refundable Reserve on a per-portfolio basis without being in full compliance
with the PCR Purchase Agreement; any such interpretation would render the bolded language
completely devoid of meaning. The Court finds that genuine issues of material fact exist regarding
whether the Debtor breached §§ 3.1.713 and 3.1.814 of the PCR Purchase Agreement by failing to
obtain the required consents to assignment of the insurance benefits, thereby forfeiting its right to
a disbursement of the Refundable Reserve on a per-portfolio basis.
13 Section 3.1.7 of the PCR Purchase Agreement warrants that the Debtor “has good and marketable
title to each AOC, being sold hereunder and each AOC shall be transferred free and clear of any lien, claim,
or encumbrance.” [ECF Doc. 168-10, § 3.1.7].
14 Section 3.1.8 of the PCR Purchase Agreement warrants that the Debtor “has obtained consent
and/or approval, to the extent that any consent and/or approval is required, to assign sell and transfer the
Accounts the Account Balances and the related AOC’s being sold and assigned.” [ECF Doc. 168-10,
§ 3.1.8].
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CONCLUSION
For the reasons set forth above, the Court finds that the Master Purchase Agreements and
Purchase Addenda constitute valid and enforceable sales of the Debtor’s invoices. Regardless of
whether any or all of the contractual provisions purporting to effect a sale and assignment of
insurance benefits to the Purchasers are enforceable, those provisions can be severed from the
remaining terms of the Master Purchase Agreements.
Accordingly,
IT IS ORDERED that PCR’s MSJ is GRANTED IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that the Trustee’s MSJ is GRANTED IN PART and
DENIED IN PART.
IT IS FURTHER ORDERED that the Claim Objection is SUSTAINED IN PART and
OVERRULED in part. PCR must amend its proof of claim within thirty (30) days to conform
with this Memorandum Opinion and Order.
New Orleans, Louisiana, September 17, 2026.
__________________________________________
MEREDITH S. GRABILL
UNITED STATES BANKRUPTCY JUDGE
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