Peoples Bank v. The Computer Room, Inc. (In re The Computer Room, Inc.)

First Alabama Bank of Tuscaloosa, N.A. (FAB) and Peoples Bank of Tuscaloosa (Peoples Bank) (creditors) were both creditors of The Computer Room, Inc. (Computer Room) (debtor). As security for a $9,843 debt, Computer Room had granted FAB a general security interest in Computer Room’s accounts receivable, inventory, and contract rights. FAB perfected its general security interest in July 1981. As security for a $6,808 loan, Computer Room had granted Peoples Bank a specific security interest in Computer Room’s accounts receivable for work that Computer Room planned to perform for the State of Alabama Highway Department (Highway Department). Peoples Bank perfected its specific security interest in September 1981. Jackson Mathews was Computer Room’s president and principal stockholder. Mathews personally guaranteed Computer Room’s obligation to repay Peoples Bank for the loan. Computer Room used the loan to purchase the equipment needed to complete the work for the Highway Department. In November 1981, Computer Room petitioned for Chapter 7 bankruptcy. On December 3, 1981, Computer Room’s attorney collected the specific accounts receivable for $9,309 from the Highway Department, as well as other accounts receivable and funds in the amount of $4,044. Thereafter, Peoples Bank filed an adversary proceeding seeking to invoke the doctrine of marshaling assets. The bankruptcy trustee had inventory valued at approximately $29,100.