In re Summit Staffing Polk County, Inc.

In August 2001, Randy Vincent d/b/a Summit Staffing, a sole proprietorship, sold and assigned certain accounts receivable to Associated Receivables Funding of Florida, Inc. (Associated Receivables) (creditor). In the agreement, Vincent gave Associated Receivables a security interest in all of his accounts receivable and in other collateral. In September 2001, Associated Receivables filed a financing statement naming Vincent as the debtor and “Summit Staffing” as an additional debtor, and listing an address of 5903 Charloma Drive for both. In March 2002, Vincent incorporated Summit Staffing as Summit Staffing of Polk County, Inc. (debtor) with a corporate address of 5903 Charloma Drive. Summit Staffing of Polk County, Inc., sold and assigned accounts receivable, including Cutrale Citrus’s accounts receivable (the Cutrale accounts receivable), to Associated Receivables. The parties did not sign a new agreement nor file a new financing statement. In October 2002, Summit Staffing of Polk County, Inc., filed for Chapter 7 bankruptcy. At that time, the Cutrale accounts receivable totaled approximately $190,000, which accrued in its entirety more than four months after the incorporation. Associated Receivables requested relief from the automatic stay to enforce its security interest in the Cutrale accounts receivable. The bankruptcy trustee (Trustee) claimed priority to the Cutrale accounts receivable as a hypothetical lien creditor under the United States Bankruptcy Code. Both the Trustee and Associated Receivables filed motions for summary judgment in bankruptcy court.