The Bamberger Blog » bankruptcy http://www.bamberger.com/blog Thu, 02 Sep 2010 13:32:16 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 Quick Perfection of Purchase Money Security Interest http://www.bamberger.com/blog/2010/02/quick-perfection-of-purchase-money-security-interest/ http://www.bamberger.com/blog/2010/02/quick-perfection-of-purchase-money-security-interest/#comments Mon, 22 Feb 2010 14:19:58 +0000 kjewell http://www.bamberger.com/blog/?p=329 A purchase money security interest transaction is virtually never susceptible to bankruptcy preference attack.  An exception to this is where the bank has not perfected the security interest on or before twenty days after the debtor receives possession of the property constituting the collateral. 

If the financing statement is not filed (or a lien is not noted on a motor vehicle title) within that time frame, what would otherwise be a protected transaction may now be attacked by the trustee and the bank may lose its lien rights.  Likewise, the Uniform Commercial Code requires perfection of the purchase money security interest within the same time frame in order for the transaction priority to relate back to the date that the security interest attached.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

]]> http://www.bamberger.com/blog/2010/02/quick-perfection-of-purchase-money-security-interest/feed/ 0 Borrower Found to Have Filed Bankruptcy in Bad Faith http://www.bamberger.com/blog/2010/02/borrower-found-to-have-filed-bankruptcy-in-bad-faith/ http://www.bamberger.com/blog/2010/02/borrower-found-to-have-filed-bankruptcy-in-bad-faith/#comments Fri, 19 Feb 2010 13:56:30 +0000 kjewell http://www.bamberger.com/blog/?p=326 In a New York case, a borrower was found to have filed a Chapter 11 bankruptcy in bad faith in order to avoid a foreclosure action filed by the lender.  In this case, the borrower owned an apartment building and had been sued by the lender for nonpayment.

The court found that the filing was done in bad faith because:

  1. The borrower had only owned one asset, the apartment building
  2. The borrower had only a few unsecured creditors with small claims
  3. The apartment building had only a few employees
  4. The property was subject to a pending foreclosure action
  5. The borrower’s financial problems pertained to the loan by the secured creditor and could have been resolved in the state court
  6. Filing immediately prior to the sheriff’s sale evidenced an intent to frustrate the lender from enforcing its rights

Although this case was decided in New York, the factors set forth in the case are applicable in Indiana, Illinois and Kentucky.

Author: Catherine A. Nestrick (bio)
Phone: 812.452.3561
email: cnestrick@bamberger.com

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