IN RE: MELON PRODUCE, INC., Debtor, JOSEPH BRAUNSTEIN, TRUSTEE, Plaintiff, Appellee, v. PETER KARGER, Defendant, Appellant., 976 F.2d 71

Summary

The creditor claimed that the money he received was not an unlawful preference because it represented a perfected security interest in rights to money that were part of a security agreement entered into prior to the preference period and that the transfer did not give him any more than the amount to which he would have been entitled in liquidation. The court held that the transfer of the money was a voidable preference. The court found that (1) the creditor's perfected security interest in the debtor's after-acquired rights to money could have related back to the filing of the security agreement for security interest priority purposes, but did not relate back for bankruptcy code preference purposes, (2) the rights to money did not fall within the special receivables exception, but came within the scope of a general preference provision that transfers were not made until the debtor had acquired rights in the property transferred and that did not take place until the preference period, ...