| ABI

September 17, 2024

A Lender Can’t Have a Lien on Avoidance Actions, Judge Thad Collins Says

The Eighth Circuit had held that a debtor has an ‘inchoate’ property interest in avoidance actions before bankruptcy, but Judge Collins ruled that a lender can’t have a lien.

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Opinion Link

View Opinion

https://abi-opinions.s3.amazonaws.com/BDC+Group.pdf

Case Details

Case Citation

In re BDC Group Inc., 23-00484 (Bankr. N.D. Ia. Sept. 10, 2024).

Case Name

In re BDC Group Inc.

Case Type

Court

8th Circuit

Iowa

Iowa Northern District

Bankruptcy Tags

Claims

Preferences

Finance and Banking

Uniform Commercial Code/Article 9

Comments

Submitted by Dawn Coulson on September 17, 2024

This may apply to preference actions only, as all of the facts, activities and details about fraudulent transfers and other claims that Trustees glom onto avoidance actions are not inchoate. Those facts existed pre-petition.

Submitted by Austin Peiffer on September 18, 2024

I believe there was a previous Rochelle's Daily Wire write-up on a case that stated fraudulent transfers sound in tort and so would be commercial tort claims and therefore subject to Article 9's special rules on perfecting security interests in those.