In re Thomaston Mills, Inc. (01-52544)
SunTrust Bank assigned its claims and first priority liens to the Chapter 11 debtor in exchange for the debtor foregoing any 11 U.S.C. 506(c) surcharges against SunTrust's interest in certain property. The Foothill Lenders contended that their second priority liens now had priority over the liens the debtor acquired through the assignment. The Court rejected Foothill's theories and determined that the debtor's liens had priority over Foothill's liens.