In re McAlmont
United States Bankruptcy Court for the Southern District of Ohio
385 B.R. 191 (2008)
Facts
On June 2, 2006, George McAlmont (debtor) purchased a motorcycle from Ackers Inc., d/b/a ASK (ASK). McAlmont and ASK entered into an installment contract in which McAlmont agreed to pay for the motorcycle in installments and give ASK a purchase-money security interest in the motorcycle. On the same day, McAlmont took possession of the motorcycle and ASK assigned the contract to Guardian Finance Company (Guardian) (creditor). However, Guardian did not notate its security interest on the motorcycle’s certificate of title until July 1, 2006. Thereafter, McAlmont filed for Chapter 7 bankruptcy. During bankruptcy proceedings, the bankruptcy trustee sought to avoid Guardian’s interest pursuant to 11 U.S.C. § 544. The bankruptcy trustee argued that Guardian had failed to perfect its purchase-money security interest because it had notated the interest on the motorcycle’s certificate of title outside of the 20-day period referenced in Uniform Commercial Code (UCC) § 9-324. Guardian maintained that, whether or not it had notated the interest within the 20-day period, it had perfected the interest before the bankruptcy filing, rendering its interest unavoidable.
Rule of Law
Issue
Holding and Reasoning (Hoffman, Jr., J.)
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