Tracy Broadcasting (Tracy) (debtor) was a broadcasting company that held a license issued by the Federal Communications Commission (FCC). Valley Bank (creditor) loaned Tracy $1.5 million. Tracy granted Valley Bank a security interest in its assets, including intangibles and their proceeds. Tracy later filed for bankruptcy. Tracy’s main creditors were Valley Bank and Spectrum Scan, which held a $1.4 million federal judgment against Tracy. Tracy’s most valuable asset was its broadcasting license. No agreements for sale of the license were pending at the time of the bankruptcy filing. Valley Bank argued the proceeds from the sale of the broadcasting license were subject to the Valley Bank security interest as a property interest acquired before the filing. Spectrum Scan argued the proceeds were subject to Spectrum Scan’s lien as property acquired post-filing. Spectrum Scan brought suit to determine the nature of the security interests. The bankruptcy court held Tracy’s interest in the proceeds of the sale of the license before any agreement of sale was reached was not sufficient to be granted as collateral to Valley Bank. The district court affirmed and Valley Bank appealed.