In Re I

80 EQUIPMENT, LLC 938 F.3d 866 (2019)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

The debtor, I80 Equipment, LLC obtained a commercial loan from First Midwest Bank (P). The parties executed an agreement, which granted First Midwest a security interest in substantially all of I80 Equipment's assets. There were twenty-six listed categories of collateral including accounts, cash, equipment, instruments, goods, inventory, and all proceeds of any assets. P timely filed a financing statement with the Illinois Secretary of State. It purported to cover 'all Collateral described in First Amended and Restated Security Agreement dated March 9, 2015, between Debtor and P.' I80 defaulted on the loan and filed under Chapter 7. The court appointed a trustee, Reinbold (D) to manage the bankruptcy assets. P sued D seeking to recover $7.6 million on the loan. P filed a declaration that its security interest in I80 Equipment's assets was properly perfected and senior to the interests of all other claimants, including D. D claimed that the financing statement did not independently describe the underlying collateral, but instead incorporated the list of assets by reference to the parties' security agreement and was thus not perfected. Both parties moved for judgment on the pleadings. The bankruptcy court ruled that a ' financing statement that fails to contain any description of collateral fails to give the particularized kind of notice' required by Article 9. D sold the estate's assets for approximately $1.9 million and holds the net proceeds pending resolution of this dispute. The parties agreed to appeal. D maintains only that P's lien is avoidable because the financing statement failed to properly indicate the secured collateral.