Crop Production Services, Inc. v. Wheeler (In re Wheeler)

(Bankr. W.D. Ky. Dec. 22, 2017)

The bankruptcy court enters summary judgment in favor of the plaintiff, finding that its lien had priority over the other lender’s lien. The other lender had perfected its lien with a UCC-1 but years later accidentally filed a termination statement. The lender then filed another document noting that the termination was accidental, attempting to reinstate the perfected lien. The plaintiff filed its UCC-1 later. The court holds that UCC Article 9 controls, and the termination statement could not be amended or revoked in order to reinstate the original UCC-1. Thus, the plaintiff’s secured claim had priority over the other lender’s claim. Opinion below.

Judge: Fulton

Attorney for Plaintiff: David T. Reynolds

Attorneys for Defendants: Steve Vidmer; Robert B. Frazer, Roy Massey, IV

2017-12-22 – in re wheeler

Author: Matt Lindblom

In re Lexington Hospitality Group, LLC

(Bankr. E.D. Ky. Nov. 1, 2011)

The bankruptcy court grants the debtor’s motion regarding cash collateral use, because the property to be used (hotel revenue and post-petition restaurant revenue) was not subject to a perfected security interest. The court determines that the hotel revenue paid in cash was not subject to the creditor’s mortgage because it was not rent. A hotel customer does not obtain a real property interest in a hotel room, but instead has a license. The cash paid for the room is thus personal property. The creditor was not in possession of the cash or deposit accounts, and thus the lien was not perfected as to that cash. Hotel revenue paid from credit cards constituted an obligation that would be a “payment intangible” under Article 9. The creditor’s financing statement failed to identify payment intangibles as collateral. While it referenced an “all asset” security agreement, that was insufficient to perfect a security interest in payment intangibles. The creditor does not have a lien on post-petition restaurant revenue pursuant to 11 U.S.C. § 552. Opinion below

Judge: Schaaf

Attorneys for Debtor: DelCotto Law Group PLLC, Laura Day DelCotto, Jamie L. Harris, Sara A. Johnston

Attorneys for Creditors: Dinsmore & Shohl LLP, Martin B. Tucker, Sarah S. Mattingly

2017-11-01 – in re lexington hospitality group

Author: Matt Lindblom

 

Liebzeit v. Intercity State Bank, FSB (In re Blanchard)

(7th Cir. Apr. 14, 2016)

The Seventh Circuit applies Wisconsin state law and holds that a mortgage can attach a lien to a vendor’s interest in a real estate contract and that the lender perfected the lien by recording in the county land records rather than filing a UCC-1 financing statement. The trustee is unable to avoid the lien. Opinion below.

Judge: Hamilton

Attorneys for Trustee: Michael F. Dubis, Christopher R. Schultz

Attorneys for Appellees: Ruffi Law Offices, Sara Lynn Ruffi, Lund Law Office, Brad M. Lund

2016-04-14 – in re blanchard

Author: Matt Lindblom