473 B.R. 669
Bankr. W.D. Pa.2012Background
- Chapter 7 Trustee seeks to determine Oxford's secured status and avoid a preference under 11 U.S.C. § 506 and § 547; Oxford is debtor's landlord and creditor.
- Trustee contends the Liquor License was not specifically named in the security agreement, though it is listed in the financing statement.
- Lease Article 30 grants Oxford a security interest in collateral including general intangibles; a UCC Financing Statement was filed on September 27, 2010.
- Financing Statement explicitly references Pennsylvania Liquor Control Board Restaurant Liquor License No. Rlllll and proceeds therefrom.
- Oxford obtained a judgment, levy on the License and related property, and, after stay relief, sold the License for $43,000 with net proceeds of $41,765.46 held in escrow.
- Court concludes the Liquor License is a general intangible and the security interest is perfected; no § 547 preferential transfer is established; Oxford entitled to net proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does general intangibles description suffice for the Liquor License? | License must be identified by number in the security agreement. | General intangibles includes the license; financing statement also identifies it by number. | Yes; general intangibles suffices to include the Liquor License. |
| Is the execution lien a preferred transfer under § 547? | Execution lien prepetition constitutes a transfer that may be avoided. | Security interest perfected prepetition; no preferential transfer. | No; no preferential transfer established. |
Key Cases Cited
- Tomb v. Lavalle, 298 Pa. Super. 75, 444 A.2d 666 (Pa. Super. 1981) ( liquor license generally treated as a general intangible under U.C.C.)
- City of Harrisburg v. Kanoff (In re Kanoff), 408 B.R. 53 (Bankr. M.D. Pa. 2009) (bankruptcy court treated liquor license as general intangible)
- First Pennsylvania Bank, N.A. v. Wildwood Clam Co., 535 F. Supp. 266 (E.D. Pa. 1982) (compared clamming license to liquor license; generally treat as general intangible)
- In re Chris-Don, Inc., 367 F. Supp. 2d 696 (D.N.J. 2005) (distinguishes state-law treatment; license as property when general intangible)