Bankr. No.:
96-40328
Adv. No.:
96-4031
Chapter:
7
Date of Decision:
January 9, 1997
Issue:
Whether a bank's security interest in a vehicle withstood the trustee's challenge as a hypothetical lien creditor § 544 where the bank's lien was not perfected pre-petition and where the vehicle was still titled in Illinois rather than in South Dakota?
Ruling:
Since vehicle was titled in Illinois on the petition date, Illinois' lien perfection rules governed. Under that law, the bank did not have a perfected security interest in the vehicle on the petition date although it had possession of the title. Accordingly, the trustee had the superior interest in the vehicle under § 544 and the bank was rendered unsecured.
Full Bankruptcy Court Decision:
