strong arm power bankruptcy
Bankruptcy Law T/F question?
11 U.S.C.A. s. 544(a) permits the trustee to se aside security interests that were unperfected as of the date of the commencement of the bankruptcy case. This is known as the strong-arm power.
Is this true or false? I can’t determine the answer for the life of me!
Thanks so much for your help.
“strong arm” power, gives the trustee in bankruptcy the status of a judicial lien creditor as of the petition date and allows the trustee to avoid any Article 9 security interest that would be subordinate to the rights of such a lien creditor. Under revised Article 9, as under prior law, this means that the trustee can avoid a security interest that has not yet been perfected as of the petition date3. Since most security interests are perfected by filing a financing statement, the standards for measuring compliance with the filing requirements will be critical in determining whether a security interest can be avoided
