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University of Missouri School of Law

Commercial law

1997

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Purchase Money Security Interests In The Preference Zone: Questions Answered And Questions Raised By The 1994 Amendments To Bankruptcy Code 547, Timothy R. Zinnecker Jan 1997

Purchase Money Security Interests In The Preference Zone: Questions Answered And Questions Raised By The 1994 Amendments To Bankruptcy Code 547, Timothy R. Zinnecker

Missouri Law Review

In October 1994, Congress approved the Bankruptcy Reform Act of 1994,' which revised various provisions of the United States Bankruptcy Code. The revisions included two amendments to the preference statute, 11 U.S.C. §547. Historically, a creditor generally could preserve from preference attack an otherwise voidable purchase money security interest if the creditor perfected its security interest no later than the tenth day after the debtor first possessed the collateral. After first discussing the basics of a preference attack on an Article Nine security interest, this article summarizes the leading cases that prompted Congress to amend 11 U.S.C. § 547(c)(3)(B), suggests …