In re McConnell (Chapter 7, Case No. 11-50729, Adv. No. 11-05071)

In order to secure his debt, the debtor signed a UCC-1 financing statement giving the defendant a security interest in an aircraft. The defendant filed the UCC-1 with the clerk of superior court but not with the FAA. The debtor later surrendered the aircraft in full satisfaction of his debt and signed an aircraft bill of sale conveying the aircraft to the defendant. The defendant filed the bill of sale with the FAA some four months later. The court held that since the conveyance of the aircraft was not filed for recording with the FAA within thirty days after the bill of sale was signed, the transfer was deemed to have occurred when the conveyance was filed for record, which was within the preference period of 11 U.S.C. ยง547(b). The court, however, held that the trustee had failed to prove, on summary judgment, that the defendant had received more than he would have in a Chapter 7 liquidation.

Thursday, August 18, 2011