In re Ajax Integrated, LLC

2016 WL 1178350 (2016)

From our private database of 46,500+ case briefs, written and edited by humans—never with AI.

In re Ajax Integrated, LLC

United States Bankruptcy Court for the Northern District of New York
2016 WL 1178350 (2016)

JC

Facts

An adversary proceeding arose from the Chapter 11 bankruptcy of AJAX Integrated, LLC (Ajax) (debtor) in which the bankruptcy trustee filed suit against DivLend Equipment Leasing, LLC (DivLend) (creditor), seeking to avoid DivLend’s unperfected security interest in equipment and vehicles. The dispute was resolved except for 30 vehicles subject to New York title-certificate requirements. Under New York law, a security interest in motor vehicles was perfected by delivering the existing title, a notice-of-lien form signed by the borrower, and a fee to the motor-vehicles commissioner. In May 2013, DivLend loaned Ajax $1.1 million under an equipment-lease agreement that required monthly payments and indicated that Ajax would execute financing statements or other documents required to evidence DivLend’s security interest. The contract also gave DivLend rights in the event of default, which could occur on failure to make payments, filing of a bankruptcy petition, or failure to perform any required obligation within 30 days of receiving notice of that failure. In the event of default, DivLend could accelerate the loan, repossess the vehicles, or file suit. After the agreement, DivLend sent notice-of-lien forms to Ajax to be signed and returned. They were never signed and returned. DivLend claimed it made several follow-up calls and emails, and Ajax denied any requests other than a mailed request on July 2, 2013. An involuntary petition for bankruptcy was filed against Ajax on March 24, 2014. The trustee argued that DivLend had failed to perfect its security interest and that the trustee’s strong-arm power took priority over an unperfected security interest. DivLend admitted that its security interest was unperfected but argued that since the failure to obtain perfection was entirely due to Ajax’s failure to sign and return the notice-of-lien forms, the court should craft an equitable remedy—either an equitable lien or a constructive trust—to defeat the trustee’s strong-arm power. Both Ajax and DivLend sought summary judgment.

Rule of Law

Issue

Holding and Reasoning (Cangilos-Ruiz, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 832,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

Here's why 832,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,500 briefs, keyed to 994 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 832,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,500 briefs - keyed to 994 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership