The bankruptcy case is a reminder on the question of ownership of collateral

By Deborah Enea, Frank Montes de Oca and Kayla Weldon (June 27, 2022, 4:15 p.m. EDT) – On April 28, the U.S. Bankruptcy Court for the Northern District of Oklahoma in Kirtley v. Mabrey Bank (In re: Rudick) held that an entity other than the debtor can confer a lien on the debtor’s property, affirming the legal standard that the consent of the true owner is sufficient to confer on a debtor, who does not has no title to the goods, sufficient rights in the security to confer a right of lien on the property.[1]

As a result, the bankruptcy court also held that the bank’s security, perfected before the debtor’s bankruptcy, was enforceable and took priority over the rights of the trustee in bankruptcy of…

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