In re Piknik Products Co.

346 B.R. 863 (2006)

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In re Piknik Products Co.

United States Bankruptcy Court for the Middle District of Alabama
346 B.R. 863 (2006)

Facts

In 1995, Piknik Products Company, Inc. (Piknik) (debtor) gave Wachovia Bank, NA (Wachovia) (creditor) a security interest in essentially all of its personal property, including equipment. Wachovia properly perfected and maintained its perfected interest by filing the requisite financing statements and continuation statements. In May 2005, Crouch Supply Company (creditor) made a proposal to sell and assemble a Juicy Juice System at one of Piknik’s facilities for $369,865. The proposal provided for a 35 percent down payment; for Crouch’s retention of title pending payment in full; and for Texas law to govern the contract. Though Piknik denied signing the proposal, Piknik made the down payment. Crouch never filed a financing statement. By July 2005, Piknik had not paid Crouch the remaining funds and Crouch had delivered, assembled, and bolted to the floor most of the Juicy Juice System. A couple of months later, Piknik filed for Chapter 11 bankruptcy. During bankruptcy proceedings, Wachovia and Crouch disputed which party had a superior interest in the Juicy Juice System. Wachovia contended that Crouch held an unperfected interest because Crouch had never filed a financing statement. Crouch argued that it held a purchase-money security interest with priority over Wachovia’s interest and that the period to perfect its interest had not run because Piknik had not yet received possession of the collateral. Crouch also argued that title had never passed to Piknik absent payment in full, per the proposal terms. Crouch and Wachovia both moved for summary judgment.

Rule of Law

Issue

Holding and Reasoning (Williams, J.)

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