Star Phoenix Mining Co. v. West One Bank

Debtor Star Phoenix Mining Company (“Star Phoenix”) and its owners, Frank and Janice Duval, appeal the district court’s order affirming the bankruptcy court’s denial of permanent injunctive relief in them adversary proceeding against creditor West One Bank (“West One”). West One cross-appeals the district court’s denial of attorneys’ fees. We dismiss the cross-appeal on attorney fees as premature, we otherwise affirm.

Star Phoenix was formed in 1989 to mine certain property in Burke, Idaho. To open its facilities, Star Phoenix borrowed $2 million from Comineo Limited. Under the loan agreements, Comineo required Star Phoenix to obtain a $1 million operating line of credit. Star Phoenix obtained the required line of credit from West One. West One in turn required the Duvals to personally guarantee the full $1 million revolving line of credit. West One’s line of credit to Star Phoenix was also secured by an interest in certain accounts receivable of Star Phoenix.

In November 1990, Star Phoenix’s mine lease was terminated, which placed Star Phoenix in default under its agreement with West One. On March 11, 1991, the Duvals confessed judgment in favor of West One in state court based…