Publication Date

Fall 1997

Journal

American Bankruptcy Law Journal

Abstract

The article examines the complexities surrounding voidable preferences and proceeds in bankruptcy law, particularly when a secured creditor holds a floating lien on a debtor's assets. It argues that payments made by the debtor to unsecured creditors using encumbered funds can be recovered by the bankruptcy trustee as voidable preferences, provided the creditor cannot trace the funds back to their trust property. The analysis critiques existing case law and proposes that the voidable preference right is never part of the debtor's estate, instead being held by the trustee. The article also challenges the notion that good faith purchasers should retain such funds, emphasizing that the debtor's interest was worthless due to encumbrance.

Volume

71

Issue

4

First Page

517

Last Page

562

Publisher

National Conference of Bankruptcy Judges (NCBJ)

Disciplines

Bankruptcy Law | Insurance Law | Law | Securities Law

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