Official Committee of Unsecured Creditors for Tyringham Holdings, Inc. v. Suna Brothers. Inc.
United States Bankruptcy Court for the Eastern District of Virginia
354 B.R. 363 (2006)
- Written by Eric Miller, JD
Facts
Suna Brothers, Inc. (Suna) (defendant) consigned jewelry to Tyringham Holdings, Inc. (debtor). Suna had a security interest in the consigned inventory. Suna sought to perfect that security interest by filing a financing statement with the Virginia corporation commission. However, Suna listed the debtor’s name on the financing statement as “Tyringham Holdings,” omitting the “Inc.” The official committee of unsecured creditors (the committee) (plaintiff) filed a complaint in the bankruptcy court to determine the validity of Suna’s lien in light of the potentially misleading error. Suna argued that “Inc.” was a noise word—i.e., a word removed or ignored in electronic searches to improve results—and that searching “Tyringham Holdings” was standard search logic that would disclose the financing statement. However, the corporation commission’s own standardized search logic did not designate “Inc.” as a noise word, and an official Uniform Commercial Code search of “Tyringham Holdings, Inc.” did not reveal the financing statement.
Rule of Law
Issue
Holding and Reasoning (Tice, J.)
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