UCC Case Brief

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NAME OF CASE

In re Ace Lumber Supply , Inc , Debtor

FACTS

Minot Builders Supply , plaintiff creditor , filed a motion for relief from automatic stay in a Bankruptcy petition filed by herein debtor . It argued that it had a valid security interest in the assets of the debtor and was in fact a secured creditor

The claim of the plaintiff creditor that it is in fact a secured creditor is hinged upon two pieces of evidence , namely , a signed U .C .C .-1 financing

statement , and several handwritten notes . The handwritten notes were offered as an authentic and faithful record of the correspondences between the plaintiff creditor and debtor conducted over the telephone as the terms of future purchases and credits were being negotiated

The trustees , on the other hand , objected to the motion saying that these pieces of evidence do not satisfy the requirements laid down by law (specifically 30-9-203 Mont . Code . Ann ) inasmuch as they do not prove a subsisting and valid security agreement between debtor and creditor

ISSUE OR QUESTION

Did the debtor execute a security agreement in favor of the plaintiff creditor , in accordance with law and jurisprudence , which would entitle plaintiff creditor security interest over debtor 's property

DECISION

No . No such security agreement , express or implied , was ever perfected The motion for relief from automatic stay filed by the plaintiff creditor is denied

REASON or RULE

The provisions of the Uniform Commercial Code are clear on the formal requirements for the...