In re TWA Inc. Post Confirmation Estate
United States Bankruptcy Court for the District of Delaware
312 B.R. 759 (2004)
- Written by Ryan Hill, JD
Facts
The United States Department of Agriculture (USDA) (creditor) performed inspections on aircraft belonging to TWA Inc. (debtor). Under 21 U.S.C. § 136a, the USDA was authorized to collect fees for inspection services. The fees were secured by statutory liens in the inspected property. Another federal statute, the Federal Aviation Act, required that liens against aircraft must be recorded with the Federal Aviation Administration (FAA). TWA filed for reorganization under chapter 11 of the bankruptcy code. The USDA filed a proof of claim for over $300,000 in inspection fees and asserted that the claim was secured by a statutory lien pursuant to 21 U.S.C. § 136a. The USDA had not recorded any of the inspection-fee liens with the FAA. The bankruptcy estate filed a motion for summary judgment on the grounds that the USDA’s inspection-fee liens were not perfected because they had not been recorded with the FAA and therefore could be avoided under 11 U.S.C. §545(2).
Rule of Law
Issue
Holding and Reasoning (Walsh, J.)
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