Inergy Propane, LLC v. Union Bank

This case involved a dispute over money that was accidentally sent to the wrong bank account. Inergy Propane mistakenly wired funds to an account at Union Bank of Chandler that belonged to a company called Powder Horn. However, Powder Horn owed money to Union Bank on existing loans. When the bank discovered the mistaken wire transfer, they kept the money and applied it toward Powder Horn's outstanding debt instead of returning it to Inergy Propane. The court ruled in favor of Union Bank. The judge found that the bank had a valid legal right to keep the mistakenly wired funds because they had a security interest in Powder Horn's account and the right to "set off" money in the account against the company's debts. This meant the bank could legally use any money in the account to pay down what Powder Horn owed them. For workers, this case shows how banks can use money in business accounts to collect on outstanding debts, even when that money comes from unexpected sources. If you work for a company that has loans or debts with their bank, funds in company accounts may not always be available for operations like payroll if the bank exercises these collection rights.