Ucc Filings
The Wilkinson court, however, was not persuaded by these arguments and held that the failure to file a continuation statement during a bankruptcy case is essentially irrelevant because the key date in determining parties’ respective security rights is the petition date. The court agreed with the that have held that a properly perfected security interest does not lapse on the expiration of the original financing statement if the expiration occurs during the pendency of a bankruptcy case. Accordingly, the court ruled in the lender’s favor, finding that it held a first priority perfected security interest in the proceeds of the cattle. The court rejected the FSA’s argument that New York law requires secured parties to file continuation statements during a bankruptcy to prevent a perfected security interest from becoming unperfected. The FSA’s reading of the applicable statute, the court noted, was flawed in that it ignored a key sentence in the Comment to section 9–515(c) of the NYUCC. The Comment specifically recognizes that bankruptcy law may “freeze” the parties’ interests at the time of a bankruptcy filing, and any postpetition lapse of a security interest is of no effect to a lender in a bankruptcy:
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