In re 11 East 36th, LLC
United States Bankruptcy Court for the Southern District of New York
85 UCC Rep. Serv. 2d 668 (2015)

- Written by Rich Walter, JD
Facts
[Editor’s Note: The casebook Commercial Finance: A Transactional Approach (Ronald J. Mann ed., 1st. ed. 2017) erroneously uses “East 36th, LLC” in the title of the case. The company’s name is “11 East 36th, LLC.”] Victoria Guthrie (plaintiff) owned a condominium unit in New York City. The remaining units in Guthrie’s building were owned either by 11 East 36th, LLC or Morgan Lofts (defendants), another limited-liability company of which 11 East 36th was the sole owner, or member. Both companies were affiliated with Morgan Investment Fund, LLC (Morgan Fund). Guthrie loaned money to Morgan Fund. The loan was secured by 11 East 36th’s pledge of collateral, which 11 East 36th described as its membership interest in Morgan Lofts. However, when Guthrie filed a Uniform Commercial Code (UCC) financing statement to perfect her security interest in this collateral, Guthrie described the collateral as Morgan Lofts’ condominium units. Morgan Lofts and 11 East 36th subsequently declared bankruptcy. Guthrie filed bankruptcy-court claims on both 11 East 36th’s interest in Morgan Lofts and on Morgan Lofts’ condominium units.
Rule of Law
Issue
Holding and Reasoning (Grossman, J.)
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