Ketchikan Pulp Co. v. Foothill Capital Corp.

MEMORANDUM **

Foothill Capital Corporation (“Foothill”) appeals a summary judgment in a declaratory proceeding filed by Ketchikan Pulp Company (“KPC”) after KPC’s sale of corporate assets to Gateway Forest Products, Inc. (“Gatewa/’), financed by Foothill, collapsed in bankruptcy. The parties here, KPC, the unpaid seller, and Foothill, the secured creditor whose security declined in value in the bankruptcy of Gateway, both moved for summary judgment on the meaning of the Asset Purchase Agreement and the Ancillary Agreements memorializing various terms and conditions of the sale, transfer, security, and partial performance thereof.

Two particular sums of money are in debate. One sum, approximately $374,000, currently in KPC’s lawyer’s trust account, is the proceeds of an equipment sale mandated by the bankruptcy court. The other sum, approximately $167,000, is allegedly owed to Foothill, as Gateway’s successor, *116 by KPC under two of the Ancillary Agreements (the Operations and Office Agreements). In late 2002, Foothill made demands on KPC for the surrender of both sums of money. KPC filed a complaint for declaratory relief in the Alaska Superior Court. Foothill removed to the…