In re Cripps
United States Bankruptcy Court for the Western District of Oklahoma
31 B.R. 541 (1983)
- Written by Douglas Halasz, JD
Facts
Jo Anne Brock (creditor) purchased certain accounts receivable from Duane Cripps’s (debtor) business. The transaction was neither a commercial-financing transaction nor a loan in which Cripps pledged the accounts as collateral. Brock took physical possession of the invoices for the accounts and had begun to collect the amounts due. However, Brock never filed a financing statement. Thereafter, Cripps filed for Chapter 7 bankruptcy. The bankruptcy trustee received funds related to the accounts receivables in question. Brock sought to obtain the funds on the ground that she was a bona fide purchaser. The bankruptcy trustee argued that Brock had not perfected her security interest in the accounts as required by Uniform Commercial Code (UCC) Article 9; that he had a superior interest in the accounts as a hypothetical-lien creditor pursuant to 11 U.S.C. § 544; and that he was, therefore, entitled to keep the funds. In response, Brock primarily relied on a case in which the court ruled that UCC Article 9 did not apply to an absolute assignment for the payment of a past-due obligation.
Rule of Law
Issue
Holding and Reasoning (Berry, J.)
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