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Delayed Perfection Of Security Interests In Personal Property And The Substantially Contemporaneous Exchange Exception To Preference Attack, Richard F. Duncan

Nebraska College of Law: Faculty Publications

The Bankruptcy Reform Act's treatment of belatedly perfected security interests in personal property is enigmatic, because it attempts to employ preference law to avoid a class of transfers, socalled "secret liens," that are not true preferences. When a security interest is granted in exchange for contemporaneous value, preference policy in bankruptcy is not offended, because the transaction does not cause a depletion of the debtor's estate for the benefit of a particular creditor. However, the effect the timing rules of section 547(e) of the New Act is to treat most security interests perfected during the preference period and more than …