(W.D. Ky. July 24, 2014)
The district court affirms the bankruptcy court’s finding that the creditor’s claim was not a secured claim. The agreement giving rise to the creditor’s claim did not evidence an intent to create a security interest in proceeds of the bankruptcy trustee’s settlement agreement with a preferential transfer defendant. There was no provision in the agreement regarding any particular property serving as collateral. Further, even if the agreement had created a security interest, the creditor had not taken steps to perfect such interest and thus the trustee could have avoided the lien in the bankruptcy. Opinion below.