Thursday, November 29, 2012

Bankruptcy Law, The Law of Debtors and Creditors Problem Set Answers, Warren Westbrook Sixth Edition - Problem Set 22

 Problem Set 22, p.476

  • 9-317(e) PMSI security interest has a look-back window with a priority over the lien creditor arising between the time the security interest attaches and the time of filing. Here the problem is that the security interest is not timely perfected; so screwed
  • §544(a) it is likely to be avoided by the TIB.

  • Perfecting the security interest after learning about the bankruptcy filing would usually violate the automatic stay; but
  • According to §362(b)(3) the automatic stay does not prohibit the perfection of the security interest under §546 (b) or the extent that such perfection is accomplished within the period in §547(e)(2)(A)
  • §546(b): The rights and powers of a trustee under §544 (the strong arm clause), §545, and §549 are subject to the generally applicable law that permit perfection.
  • Generally applicable law means 9-317(e) PMSI 20-day look-back window.
  • Perfection under 9-317(e) also gets the priority of PMSI.
  • §547(e)(2)(A) has a 30-day grace period to perfect a security interest in the transfer of real property. It is superior to a BFP. We do not care about the 20 days any more.
  • BFP gets the land free of mortgage or not? Get the land free of mortgage unless it is recorded; mortgage is a serious thing, so lack of the signature may not beat the BFP; so TIB or DIP may have a power to avoid the defective mortgage.
 Problem Sets: Table of Contents

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