In the course of operating a pulp mill, Port Alice Specialty Cellulose Inc (PASCI) required a large
Question:
In the course of operating a pulp mill, Port Alice Specialty Cellulose Inc (PASCI) required a large amount of oil. For many years, it purchased its oil from ConocoPhillips Co. Last July, ConocoPhillips sold and delivered 30 barrels worth of oil to PASCI. That shipment was added to PASCI's large, underground tank, which already held 60 barrels worth of the same type of oil. The new oil and the old oil became completely mixed. PASCI withdrew 15 barrels of oil from the tank and used it for business purposes. It then became bankrupt and its pulp mill immediately shut down. PASCI has few assets, but it owes a great deal of money to a large number of creditors. It intends to sell the oil remaining in its underground tank and to distribute the sale proceeds amongst all its creditors. ConocoPhillips is one of those creditors because it was not paid for its last delivery of oil to PASCI. ConocoPhillips, however, claims that it does not have to stand in line with PASCI's other creditors. It believes that it is entitled to use a special remedy that will allow it to take back the oil that it delivered, and to walk away from PASCI's financial mess. What remedy does ConocoPhillips have in mind? Do you think that its argument will be successful? Explain your answer.
Step by Step Answer:
Managing the Law The Legal Aspects of Doing Business
ISBN: 978-0133847154
5th edition
Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer