James

OneCast Media, Inc. (OneCast) held a lease for office space in a building owned by First Avenue West Building, LLC, later acquired by First West Building 00, LLC (the Landlord). The lease was secured by a substantial security deposit comprised of cash and a letter of credit. In November 2000, OneCast ceased paying rent and filed for bankruptcy. Nancy James was appointed bankruptcy trustee for the estate (Trustee) and rejected the lease. The Landlord drew down the letter of credit and retained the proceeds as a security deposit. In an adversary proceeding in bankruptcy court, the Trustee sought to recover the remaining security deposit. The court ruled that to the extent the claim sought recovery of the portion of the security deposit secured by the letter of credit, the letter of credit was not property of the bankruptcy estate and therefore not within the bankruptcy court’s jurisdiction. The Trustee moved for reconsideration, which the bankruptcy court denied. The Trustee then appealed to the district court and that court reversed and remanded to the bankruptcy court to permit the Trustee to pursue recovery of damages up to the full amount of the security deposit, including the…