State Bank of Toulon v. Covey (In re Duckworth)

(7th Cir. Nov. 21, 2014)

The Seventh Circuit reverses the bankruptcy court’s orders finding the lender’s security interests enforceable despite a mistaken reference to the promissory note purportedly secured. The security agreement recited that it secured a promissory note dated December 13, but the promissory note was dated December 15. The court holds that parol evidence cannot be used to save the security agreement, due to the trustee’s strong-arm powers. Opinion below.

2014-11-21 – state bank of toulon v covey