In re Georgetown Steel Co., LLC
United States Bankruptcy Court for the District of South Carolina
318 B.R. 352 (2004)
Georgetown Steel Company, LLC (Georgetown) (plaintiff) processed and sold steel, using hot briquetted iron (HBI) as a raw material. Progress Rail Services Corporation (Progress Rail) (defendant) was a supplier of HBI. Georgetown and Progress Rail entered into a purported consignment agreement. Under the agreement, Progress Rail delivered HBI to Georgetown, Progress Rail maintained title to the HBI, and Georgetown stored the HBI on its property. Georgetown would use the HBI in the processing of steel and report to Progress Rail how much HBI was used each week and pay for that amount. Progress Rail did not file a financing statement. During the term of the agreement, Georgetown ceased operating and filed for bankruptcy. Georgetown filed a complaint in the bankruptcy court, seeking a declaratory judgment that Georgetown’s interest as a debtor-in-possession was superior to Progress Rail’s interest as a consignor. Progress Rail claimed that the transaction was a sales transaction that fell outside of Alabama’s version of Article 9 of the Uniform Commercial Code (UCC).
Rule of Law
Holding and Reasoning (Waites, J.)
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