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Secured Transaction

Scope Issues

In re Palmdale Hills Property, LLC,
457 B.R. 29 (9th Cir. BAP 2011) Repurchase agreements relating to mortgage loans were true sales, not secured transactions, even though the putative buyer had an obligation to resell identical loans and the loans were unique because the transaction documents unambiguously indicated the parties’ intent was that the transaction be a true sale.

Aniebue v. Jaguar Credit Corp.,
708 S.E.2d 4 (Ga. Ct. App. 2011) Four-year lease of a new Jaguar with an option to purchase at the end for $19,684 was a true lease.  Therefore Article 9’s requirement of notification before disposition did not apply.  Lessees who defaulted were thus, pursuant to the terms of the lease, required to pay the difference between the Adjusted Capitalized Cost and the resale proceeds, plus costs.  Summary judgment was not appropriate on what other costs were recoverable because the lessor had not adequately explained them.

In re Warne,
2011 WL 1303425 (Bankr. D. Kan. 2011) 61-month lease of semi-tractor that was non‑cancellable and which contained an option to purchase at the end for $31,100 was a true lease even though the lessee had provided a security deposit equal to the purchase option price.  The purchase option price was a reasonable estimate of the tractor’s value at the end of the lease term.

In re Kentuckiana Medical Center LLC,
455 B.R. 694 (Bankr. S.D. Ind. 2011) Non-cancellable equipment leases that gave lessee three options at the end – (i) to purchase the equipment for $238,000; (ii) lease the equipment for one month for $238,000 and become the owner thereafter; or (iii) return the equipment to the lessor, paying the costs of shipping and guarantying that the lessor will realize upon sale at least 10% of its acquisition cost – was a sale with a retained security interests because the first two options, which resulted in the lessee becoming the owner, were less than the reasonably predictable cost of the third.

C and J Vantage Leasing Co. v. Wolfe,
795 N.W.2d 65 (Iowa 2011) Non‑cancellable equipment lease that contained $1 purchase option was a sale with a retained security interest.  Nevertheless, “hell or high water,” clause was enforceable and therefore the debtor/lessee claims and defenses against the supplier were generally unavailable against the secured party/lessor, except those that relate to contract formation, such as fraud in the inducement.

Filer, Inc. v. Staples, Inc.,
766 F. Supp. 2d 314 (D. Mass. 2011) Because assignment of rights under single contract was for the purpose of collection and in satisfaction of a pre‑existing indebtedness, Article 9 did not apply and, therefore, the anti-assignment rule of § 9‑406(d) did not invalidate the contractual restriction on assignment without the account debtor’s consent.  Consequently, the assignee was not a proper party to maintain an action on the contract.  No discussion of whether assignee was an agent of assignor.

In re Ocean Place Development, LLC,
447 B.R. 726 (Bankr. D.N.J. 2011) Despite language in assignment agreement, hotel’s room revenues were accounts or payment intangibles, not rents, and thus an assignment of them was governed by Article 9.  Because the assignment was for security purposes, the hotel had sufficient rights in the revenues for them to be property of the estate.

In re Harbour East Development, Ltd.,
2011 WL 3035287 (Bankr. S.D. Fla. 2011) Consensual lien on debtor’s interest as seller in forfeited deposits made in connection with contracts to sell real estate was governed by real estate law, not by Article 9.  Even if Article 9 applied, the mortgagee was perfected because the escrow agent had possession of the funds  on behalf of the mortgagee and money, when deposited into a bank account, is still money.

In re QA3 Financial Corp.,
2011 WL 1297840 (Bankr. D. Neb. 2011) Security interest in unearned insurance premiums was not governed by Article 9.  Accordingly, lender that financed the debtor’s insurance policy and obtained an irrevocable power of attorney to cancel the policy and to collect all unearned premiums in the event of default was entitled to relief from the stay to do so even though the lender had not filed a financing statement.

Textron Financial Corp. v. Weeres Industries Corp.,
2011 WL 2682901 (D. Minn. 2011) Inventory lender’s claim against manufacturer for breach of agreement to repurchase repossessed inventory of its dealers was not governed by Article 9, and therefore lender had no duty to manufacturer to sell the inventory in a commercially reasonable manner.  The lender’s general duty to mitigate damages was waived in the repurchase agreement and, in any event, did not require the lender to refinance the inventory with another dealer or permit the manufacturer to make interest payments to cure the defaulting dealers’ defaults.

In re Salander O'Reilly Galleries,
453 B.R. 106 (Bankr. S.D.N.Y. 2011) Law of New York – where the debtor was located – governed the effect of the debtor’s consignment agreement, not the foreign law chosen in the parties’ agreement.  As a result, clause calling for arbitration under the law of the Channel Islands would not be enforced.

Modtech Holdings, Inc. v. Monteleone & McCrory LLP,
2011 WL 1429631 (C.D. Cal. 2011) Law firm had valid attorney’s lien on amounts recovered in contract litigation – for which no financing statement was required to perfect – pursuant to agreement with the client and the lien covered fees generated in matters unrelated to the action giving rise to the recovery.

Attachment Issues

Existence of Security Agreement

United States v. 1997 International 9000 Semi Truck VIN: 1HSRUAER8VH409632
412 Fed. Appx. 118 (10th Cir. 2011) Despite the existence of an authenticated security agreement, brother of convicted drug trafficker failed to prove that he had a valid security interest in the trafficker’s truck sufficient to prevent forfeiture because the note had several irregularities, the trafficker never made any payments over the eighteen months between the alleged issuance of the note and the trafficker’s arrest, and the brother never testified that he was unaware of the trafficker’s illegal conduct.

Roswell Capital Partners LLC v. Beshara,
436 Fed. Appx. 34 (2d Cir. 2011) Lender’s security interest in debtor’s assets was extinguished when the lender converted the debtor’s notes to equity, and nothing in the documents restored the lender’s priority when equity was re-converted to debt.  Unclear if court was saying, as the lower court did, that the security interest did nor re‑attach at all or merely that the re-attached security interest did not have priority.

Zaremba Group, LLC v. FDIC,
2011 WL 721308 (E.D. Mich. 2011) Husband of managing member of LLC had no apparent authority to grant bank a security interest in LLC’s certificates of deposit because apparent authority must arise from acts of the principal, not the agent, and the LLC did nothing other than make the initial deposit shortly after the husband said it would occur.  The LLC did not ratify the purported grant by signing a bank resolution ratifying all transactions purportedly done on the LLC’s behalf because the LLC had no knowledge of the husband’s actions at the time and the loan purportedly secured by the CDs was not for the LLC’s benefit.  The LLC had a valid contract claim against the bank for failure to honor the CDs, but not a claim for conversion, unjust enrichment, or wrongful detainer.

Monlezun v. Lyon Interests, Inc.,
2011 WL 5172331 (La. Ct. App. 2011) Because a resolution of a corporations board of directors authorized the president to pledge corporate equipment as collateral for loan to himself and his wife, and the resolution expressly indicated that it would remain in force until the lender received notification of its revocation, the president was authorized to pledge the collateral for a second loan after he had paid off the first.

In re Jojo's 10 Restaurant, LLC,
455 B.R. 321 (Bankr. D. Mass. 2011) No authenticated security agreement existed even though the asset purchase agreement provided that the buyer’s obligation “shall be secured by a standard form UCC Security Agreement,” and the filed financing statement described the collateral.  The asset purchase agreement lacks granting language and the financing statement was not signed by the debtor.  Although the debtor did purport to pledge a liquor license, Massachusetts law gives limited property rights in such a license only if the pledge is approved by the licensing authority.  because no approval was granted, the debtor had no property rights in the license and no security interest attached to it.

Lopes v. Fafama Auto Sales,
2011 WL 6258818 (Mass. Ct. App. 2011)Combination of two documents signed by the car buyer – a bill of sale stating that the car dealer had a right to repossess the car for nonpayment and a certificate of title application listing the dealer as sole the lienor – constituted an authenticated security agreement.

In re Global Aircraft Solutions, Inc.,
2011 WL 3300241 (9th Cir. BAP 2011) Garageman’s possession of aircraft navigation unit pursuant to oral security agreement was sufficient for security interest to attach and be perfected.

Quality Ford Auto. Sales, Inc. v. Ford Motor Credit Co., LLC,
2011 WL 2935161 (Ky. Ct. App. 2011) Corporate car dealership that granted signed security agreement with financier remained bound by the agreement after ownership of the corporation changed.

Hadassah v. Schwartz,
2011 WL 4862757 (Ohio Ct. App. 2011) Judgment creditor could garnish funds law firm held in client trust fund for judgment debtor because there was no written agreement granting the law firm a security interest.

In re Debaeke,
2011 WL 5563543 (Bankr. E.D. Mich. 2011) Because, in the court’s judgment, the defendant’s $1,000 payment to the plaintiff was a gift not a loan, the defendant could not have a security interest in the plaintiff’s go-cart that the defendant was storing.

Laborers Pension Trust Fund‑Detroit and Vicinity v. Interior Exterior Specialists Co.,
2011 WL 5211481 (E.D. Mich. 2011) Written agreement pursuant to which a judgment defendant transferred funds during appeal to a special account held by the judgment creditor, and which provided a source for payment of the judgment if the appeal was overruled, was a security agreement even though it did not expressly use the words “security interest.”  Because the judgment creditor’s interest was perfected by possession, it was senior to the rights of a judicial lien creditor that had attempted to garnish the funds.

Description of the Collateral

U.S. Bank v. Hanson,
2011 WL 2847414 (D. Idaho 2011) Brick machine that turns sawdust into wood bricks and which was integrated with existing equipment of wood pellet manufacturer by connection to a conveyor system is an “accessory” to listed collateral within the meaning of the manufacturer’s security agreement.

Pearson v. Wachovia Bank,
2011 WL 9505 (S.D. Fla. 2011) Security agreement that described the collateral as “[a]ll of the investment property . . . held in or credited to” three designated securities accounts was sufficient even though the secured party later issued one monthly statement for all three accounts using a different, single account number because the three pledged accounts were not in fact consolidated into a new account.  Even if the bank had consolidated the three accounts, the new account would still be covered by the security agreement, which expressly extended to “additions, replacements, and substitutions” of the listed collateral.

In re O & G Leasing, LLC,
456 B.R. 652 (Bankr. S.D. Miss. 2011) Description of collateral as “Performance Drilling Rig # 3” and four other numbered rigs was sufficient even if the exhibit providing a more complete description was not attached when the debtor signed the security agreement because the description was sufficient “to raise a red flag to a third party, so as to indicate that more investigation may be necessary to determine whether an item is subject to a security interest.”  In addition, the exhibit is part of the security agreement even though attached after the debtor signed it.

Regions Bank v. Bric Constructors, LLC,
2011 WL 6288033 (Tenn. Ct. App. 2011) Description of collateral in security agreement as “Hydraulic Excavator w/ Tramac V1600 Hammer Eq. # C0442 and a 36" HD Hensley Bucket Stock # A6775” was sufficient and created no confusion about which hydraulic excavator was covered.

In re Inofin, Inc.,
455 B.R. 19 (Bankr. D. Mass. 2011) Original security agreement and financing statement that described the collateral to be “motor vehicle installments sales contracts purchased by Debtor with the proceeds of loans from Secured Party and assigned and delivered to Secured Party” did not include chattel paper not financed by the secured party.  Subsequent loan agreement providing that “[a]s security . . . , Borrower shall assign and deliver to Lender, . . . Installment Contracts” removed the requirement that the secured party provide the financing for collateralized chattel paper but the secured party gave no value for that additional collateral.

In re HT Pueblo Properties, LLC,
2011 WL 5041767 (Bankr. D. Colo. 2011) Security agreement that described the collateral to include “[a]ll accounts, general intangibles. . . [and] rents . . .arising out of a sale, lease, consignment or other disposition of any of the . . . Collateral” did not cover room rents of hotel because there was no disposition of the property, merely operation of the property.  Deed of trust that purported to grant a UCC security interest in “all present and future rents revenues, income, . . . and other benefits derived from the [subject] Property” does not clearly grant a security interest in the fees, charges, accounts, or other payments for the use or occupancy of rooms and in any event such an interest is in personalty and is governed by Article 9, and therefore must be created in the security agreement, not in ancillary documents.

Beane v. Beane,
2011 WL 223167 (D.N.H. 2011) Claims of corporation against former employee/owner were commercial tort claims and therefore generic references in the security agreement to “accounts and other rights to payment” and “payment intangibles” were insufficient to create a valid security interest in those claims.  Accordingly, a sheriff’s sale of the collateral to the former employee/owner did not transfer the commercial tort claims and the former employee/owner did not have the right to have the claims dismissed.

Algonquin Power Income Fund v. Christine Falls of New York, Inc.,
2011 WL 6178802 (N.D.N.Y. 2011) Claim for engineering malpractice could not be assigned under Connecticut law (prior to enactment of revised Article 9) and, even if it could be, security agreement describing the collateral as “any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible,” while sufficient to cover a chose in action, was not sufficiently specific to cover the existing malpractice claim.  Subsequent agreement covering  “actions and rights in action . . . arising from or relating to any of the property described” also did not cover the malpractice claim because the claim did not involve damage to property.  Moreover, no security interest attached when the malpractice action transformed to a judgment, bond, and contract claim because if a security agreement does not grant a security interest in a tort claim or its proceeds, no subsequent transformation will “magically” result in an automatic attachment of those proceeds.

In re Taylor,
2011 WL 841511 (Bankr. E.D. Ky. 2011) Security agreement that described the collateral as “155 head of mixed breed cows and calves” without specifying which particular cattle would be deemed, in the absence of any other reasonable approach, to cover the last 155 cattle sold by the debtor and the proceeds thereof.

In re McKenzie,
2011 WL 2118689 (Bankr. E.D. Tenn. 2011) Slight errors in the names of the LLCs in which the debtor had pledged membership interests were immaterial because it was possible to determine the interests pledged by looking at the names of the entities in which the debtor had an interest.  However, pledge of membership interest in “Exit 20, LLC” was inadequate because the debtor had a membership interest in two entities whose names began with “Exit LLC” – Exit 20 Properties, LLC and Exit 20 Development, LLC – and it was not objectively possible to ascertain which interest had been pledged.

In re Moore,
2011 WL 2457343 (Bankr. N.D. Miss. 2011) Description of collateral as “[a]ll crops, and farm products whether any of the foregoing is owned now or acquired later; whether any of the foregoing is now existing or hereafter raised or grown” was sufficient to cover future year’s harvest, as well as the proceeds thereof.

In re Holland,
2011 WL 5902778 (Bankr. E.D.N.C. 2011) Debtor’s mobile home used as a principal residence was collateral for refinanced loan pursuant to language in security agreement providing that “[p]roperty given as security under this Plan or for any other loan I have with the credit union will secure all amounts I owe the credit union now and in the future.”  Although the security agreement went on to state that “property securing another debt will not secure advances under the Plan if such property is my principal residence (unless the proper rescission notices are given and any other legal requirements are satisfied),” the mobile home was not excluded by this clause because the mobile home secured not another debt but the stated debt because the mobile home was included in the recital of security in the advance receipt under which the debt was refinanced.

In re Southeastern Materials, Inc.,
452 B.R. 170 (Bankr. M.D. N.C. 2011) Description of collateral as” all of the Debtor’s . . . equipment, wherever located,” but which also stated that “the address where the Debtor keeps and maintains the equipment is . . . Columbus County,” created a factual issue as to whether the parties intended to encumber equipment located in a different county.

Method of Perfection

In re K-Ram, Inc.,
451 B.R. 154 (Bankr. D.N.M. 2011) Funds paid into court registry in connection with debtor’s slander of title claim were proceeds of a commercial tort claim.  Bank that previously received an Assignment of Any and All Excess Proceeds held a security interest in the commercial tort claim and, because the bank never filed a financing statement, its interest was unperfected and avoidable in the debtor’s bankruptcy.

Epstein v. Coastal Timber Co., Inc.,
711 S.E.2d 912 (S.C. 2011) Although both Articles 2 and 9 treat timber to be cut as goods and the latter provides that a security interest in the timber can be perfected by filing a financing statement, a recorded mortgage on the land – even one that does not specifically mention the timber – also encumbers the timber and, if recorded first, has priority.

In re McConnell,
455 B.R. 824 (Bankr. M.D. Ga. 2011) Security interest in civil aircraft must be recorded with the FAA to be perfected; filing a financing statement is inadequate to perfect.

Adequacy of Financing Statement

Hancock Bank of Louisiana v. Advocate Financial, LLC,
2011 WL 94425 (M.D. La. 2011) Section 9‑509(b)(1)’s authorization to file an “initial financing statement” allows the secured party to file a second financing statement after the first financing statement lapsed.  Even if the temporary lapse of perfection did somehow irrevocably prejudice the guarantor’s subrogation rights, the guarantor had expressly waived any defense based on such impairment.

In re Harvey Goldman & Co.,
455 B.R. 621 (Bankr. E.D. Mich. 2011) Financing statement that identified the corporate debtor by its registered assumed name, “Worldwide Equipment Co.,” rather than the name on its articles of incorporation, “Harvey Goldman & Company,” was ineffective to perfect.  Registration of the assumed name does not make it the proper name to use in the financing statement under or prevent a financing statement using that name from being seriously misleading.

In re PTM Technologies, Inc.,
452 B.R. 165 (Bankr. M.D.N.C. 2011) Financing statements that omitted the “h” in the debtor’s name and which were not disclosed in a “standard” web search but were disclosed in a “non-standard” web search were ineffective to perfect because the filing office’s rules provide for an exact word match (while ignoring certain “noise” words) and the “standard” search is the one that follows these rules.

In re Camtech Precision Manufacturing, Inc.,
443 B.R. 190 (Bankr. S.D. Fla. 2011) Filed financing statements listing additional debtors on separate paper exhibits but which did not indicate in the additional debtors box of the financing statement to look beyond the first page or use the official addendum (form UCC1Ad) to indicate additional debtors were inadequate to perfect security interests granted by additional debtors given that the filings were not indexed by or discoverable under the names of the additional debtors.  Had the additional debtor information been submitted using an approved standard form or had there been a direction in the additional debtor box on the first page to look at the exhibits for additional debtor information, the result here would be different.

Textron Financial Corp. v. New Horizon Home Sales, Inc.,
2011 WL 901844 (N.D.W. Va. 2011) Financing statement that listed president of corporate debtor as the first debtor and the corporation as an additional debtor was effective to perfect even though the filing office failed to index it under the corporation’s name; the filer had no duty to run a lien search to check for errors.

In re D & L Equipment Inc.,
457 B.R. 616 (E.D. Mich. 2011) Financing statement that described the collateral as “[e]quipment and inventory financed by The CIT Group” was effective to perfect equipment and inventory financed by Wells Fargo Equipment Finance Inc. after it acquired the secured loan and filed an amendment changing the name of the secured party – but not the collateral description – because the filings collectively provided notice of the possibility that Wells Fargo had assumed CIT’s role in the financing arrangement.

In re Borges,
2011 WL 4101096 (Bankr. D.N.M. 2011) Although the security agreements authenticated by the debtor secured all present and future debts owed by the debtor to both the secured party and the secured party’s affiliates, and therefore granted a security interest to the affiliates, because only the secured party was listed on the financing statement, the affiliates’ security interests were unperfected.

SEC v. Kaleta,
2011 WL 6016827 (S.D. Tex. 2011) Financing statement filed by representative of secured party did not perfect security interest claimed by other creditors absent evidence that the representative had an agency relationship with the other creditors.

In re O & G Leasing, LLC,
456 B.R. 652 (Bankr. S.D. Miss. 2011) Financing statement filed more than 30 days after separate secured loans were consolidated did not render the security interest preferential because earlier filed financing statements for each individual loan, each with its different collateral, remain effective to perfect the security interests in the collateral.

Authorization of Termination Statement

Official Committee of Unsecured Creditors v. City National Bank,
2011 WL 1832963 (N.D. Cal. 2011) Secured party that, in connection with the debtor’s sale of some collateral, provided the title company serving as escrow agent with UCC-3s releasing specified collateral but not terminating the filings had not authorized the title company to check the termination box.  As a result, the termination statements were unauthorized and did not render the security interest in the remaining collateral unperfected.

In re Negus-Sons, Inc.,
2011 WL 2470478 (Bankr. D. Neb. 2011), aff’d,
2011 WL 6413617 (8th Cir. BAP 2011) Secured party that, after receiving prospective lender’s letter requesting a payoff amount, seeking confirmation of the secured party’s willingness to terminate its security interest, and enclosing a proposed amendment to its UCC filings to effectuate the termination, responded with letter providing payoff figure and stating “[u]pon receipt of payoff all liens will be released,” authorized prospective lender to file termination statement.  Therefore, secured party’s prior loan to the same debtor, even if secured, was not perfected.

AEG Liquidation Trust v. Toobro N.Y. LLC,
932 N.Y.S.2d 759 (N.Y. Sup. Ct. 2011) Unauthorized termination statement did not affect the perfection or priority of the secured party’s security interest.  As a result, the collateral remained subject to the secured party’s lien even after a foreclosure sale by a lender with a subordinate security interest.


Smith v. Powder Mountain, LLC,
2011 WL 2457906 (S.D. Fla. 2011) Creditor that received court order awarding it the debtor’s securities accounts and that then proceeded to discuss with securities intermediary on how to transfer the entitlements did not have control under § 8-106(d)(2) sufficient to defeat the rights of intervening garnishor.  Control requires not mere agreeability but a contractual right.  While the intermediary had expressed a willingness to acquiesce in the creditor’s orders, the parties had not yet agreed on whose signatures would be needed on those orders when the garnishment order was served.


Travel Express Aviation Maintenance, Inc. v. Bridgewiew Bank Group,
942 N.E.2d 694 (Ill. Ct. App. 2011) Secured party is not required to file continuation statement with FAA for its security interest in aircraft to remain perfected.

In re Willis,
2011 WL 1168408 (Bankr. E.D. Tex. 2011) Bank that did not file a financing statement with respect to its security interest in an annuity to secure an indebtedness was not perfected by letter sent to issuer instructing issuer to pay the bank because the issuer did not acknowledge that it held the annuity for the bank’s benefit.  There was no evidence or even any of the factual allegations necessary to establish that the assignment was a insignificant portion of the debtor’s payment intangibles, and thus automatically perfected under § 9-309(2).

In re Wright Group, Inc.,
443 B.R. 795 (Bankr. N.D. Ind. 2011) Transactions in which patrons of miniature golf course pay for use of the course and receive permission to use a golf club, ball, scorecard, and pencil, are licenses to use the facility; they do not generate proceeds of the equipment and, because they are cash transactions, do not generate accounts.  Any security interest in money received from patrons prepetition was not perfected due to a lack of possession.  Any security interest in post-petition receipts is cut off by § 552.

In re McCoy,
2011 WL 3501851 (Bankr. E.D.N.Y. 2011) Cooperative association had, pursuant to its by-laws, a security interest in debtor’s shares in the debtor’s cooperative apartment and this security interest was automatically perfected under New York’s non‑uniform version of § 9-308.

In re Winchester,
2011 WL 3878336 (Bankr. E.D. Ky. 2011) Because the debtor used his all‑terrain vehicle for recreation and transportation, it was a consumer good and the PMSI granted to the secured party’s assignor before ATVs became subject to the state’s certificate-of-title statute was automatically perfected

Bogus Filings

United States v. Thomas,
2011 WL 9569 (E.D. Cal. 2011) Financing statement filed by taxpayer against IRS employee declared null and void and taxpayer enjoined from filing further financing statements.

United States v. Merritt,
2011 WL 9736 (E.D. Cal. 2011) Financing statement filed by taxpayer against IRS employee declared null and void and taxpayer enjoined from filing further financing statements.

United States v. Castle,
2011 WL 1585832 (E.D. Cal. 2011) Financing statements filed by taxpayers against IRS employees declared null and void and taxpayers enjoined from filing further financing statements.

United States v. Marty,
2011 WL 4056091 (E.D. Cal. 2011) Financing statements filed by taxpayer against IRS employees, Justice Department attorney, and federal judge declared null and void and taxpayers enjoined from filing further financing statements.

United States v. Merritt,
2011 WL 5026074 (E.D. Cal. 2011) Financing statement filed by relative of taxpayer against IRS employee declared null and void and both the filer and taxpayer enjoined from filing further financing statements.

United States v. Baker,
2011 WL 1322262 (S.D. Ind. 2011) Financing statement filed by inmate against sentencing judge declared invalid and inmate enjoined from filing further financing statements.

People v. King,
2011 WL 1438090 (Mich. Ct. App. 2011) Inmate was properly convicted and sentenced to 3-10 years for filing a false financing statement against corrections officer.

PMSI Status

In re Penrod,
636 F.3d 1175 (9th Cir. 2011) Dissent from refusal to rehear en banc earlier panel decision concluding that negative equity in trade-in vehicle is not part of the purchase-money obligation.

In re Siemers,
2011 WL 5598349 (Bankr. W.D. Wash. 2011) Down payment made when debtor purchased a new vehicle and traded in old truck with negative equity was allocable to the negative equity, leaving a purchase-money obligation for the entire amount financed minus the thereby reduced negative equity.

In re Inofin, Inc.,
455 B.R. 19 (Bankr. D. Mass. 2011) Chattel paper financier could not have a PMSI in the chattel paper even if the chattel paper itself represented a PMSI in the goods financed.

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