*936 DECISION
This сase was remanded to this court by The Honorable Myron L. Gordon, United States district judge, to address the issues of whether perfection of a state court supplementary receiver’s lien is required after its creation and, if so, how perfection is accomplished. The determination of these issues shall dictate how the proceeds now being held in the bankruptcy estate are to be distributed to creditors.
BACKGROUND
The debtor, Badger Lines, Inc. (“Badger”), incurred a debt to Emerald Industrial Leasing Corporation (“Emerald”). Emerald obtained a default judgment against Badger on September 20, 1991 for $82,120.26.
On October 21, 1991, Court Commissioner James Hemmer ordered Badger to appear for a suрplementary examination in connection with the judgment granted to Emerald. The order to appear was served on October 30, 1991, and a supplementary examination was conducted of James Buehmeier, president of Badger, on November 12, 1991. On December 17, 1991, Court Commissioner Hemmer appointed Douglas F. Mann as supplementary receiver on behalf of Emerald and ordered Badger to turn over its assets to the receiver within ten days.
On February 11, 1992, Badger filed a voluntary bankruptcy petition under chapter 7, and Robert M. Waud was appointed trustee of the bankruptcy estate. Waud liquidated Badger’s assets and is currently holding $46,-785.12, together with interest which has since accrued, on behalf of the bankruptcy estate.
On March 16, 1992, Mann filed a proof of claim in this bankruptcy estate as a secured claim, asserting a receiver’s lien. 1 On April 25, 1995, Mann filed a turnover motion for recovery of the proceeds held by Waud. Wisconsin Health Fund, a priority lien claimant, and the United States Trustee have joined the bankruptcy trustee in opposing Mann’s turnover motion.
On October 25, 1995, this court decided that the Emerald lien was created upon Mann’s appointment as supplementary receiver and that, because the appointment was made within the 90-day preference period, the lien, when created, constituted a preferentiаl transfer and was not valid as against the bankruptcy trustee. This decision was appealed to the district court and reversed. Judge Gordon ruled that, under
Kellogg v. Cotter,
DISCUSSION
11 U.S.C. § 547(b) of the Bankruptcy Code makes certain transfers by a debtor avoidable as preferences. In
In re Rude,
1. A transfer of property of the debtor,
2. To or for the benefit of a creditor,
3. On account of an antecedent debt,
4. Made within 90 days of bankruptcy,
5. While the debtor is insolvent, and
*937 6. With the effect of giving the creditor a greater return on his debt than wоuld have been the case had the transfer not taken place and had there been a distribution under the liquidation provisions of the Code.
Only the first and fourth elements are in issue in this ease.
11 U.S.C. § 101(54) defines a transfer as:
... every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the debtor’s equity of redemption.
The definition of “transfer” is worded as broadly as possible. S.Rep. No. 989, 95th Cong., 2d Sess. 27 (1978),
reprinted in
1978 U.S.C.C.A.N. 5787, 5813;
Matter of Freedom Group, Inc.,
A distinction must be drawn between creation of a lien and perfection of a hen. Here, as established by Judge Gordon’s ruling, the receiver’s hen was created outside of the 90-day preference period. Perfection, however, is another matter. If no additional steps are necessary for perfecting such hen аfter the creation of the hen, the receiver’s hen is complete, or “self-perfecting,” and Mann’s supplementary receiver hen would not be voidable. On the other hand, if additional steps are required to be taken after creation of this hen to complete perfection and those steps either were not tаken in this case or were taken within the 90-day preference period, then Mann’s supplementary receiver’s hen is unperfected and voidable by the trustee.
Mann argues that his hen is superior over the interest of Trustee Waud because, upon creation of his hen, no further steps are mandated for perfection by any Wisconsin statute or Wisconsin ease law. Waud, on the other hand, joined by the United States Trustee and Wisconsin Health Fund, asserts that until additional steps for perfection had been accomphshed, the supplementary receiver’s hen was only inchoate and would not trump Waud’s interest as trustee.
This court recognizes that some hens, upon creation, are choate and therefore vahd against ah subsequent competing interests. Actual delivery of tangible personal property to a creditor is one example of such self-perfecting hens. 4 Collier on Bankruptcy § 547.16, at 547-76 (Lawrence P. King, et al. eds. 15th ed. 1996). Self-perfection can also be specifically declared by statute. See, for example, Wis.Stat. § 779.89 (1994) (pre-paid maintenance hens). Recently, Wis.Stat. § 409.302(1)(d) (1994) was amended to provide that no UCC financing statement is required to perfect a purchase money security interest in any consumer goods. 1995 Wis. Act 449 § 94m (effective August 1, 1996). The Wisconsin legislature chose to make these hens self-perfecting. In contrast, there is no statute making a supplementary receiver’s hen self-perfecting. This court must determine if the supplementary receiver’s hen was perfected upon its creation or at some later point in time.
Generally, state law determines the property interests of the parties, including any perfection requirements for Hens.
Butner v. U.S.,
No statute or ease law in Wisconsin deals with perfection of a supplementary receiver’s lien.
Kellogg v. Coller, Alexander v. Wald
and
Candee v. Egan
only decided when a supplementary receiver’s lien is created; perfection was not discussed. The Wisconsin decision of
Holton v. Burton,
The lack of any explicit Wisconsin precedent on this issue does not necessarily mean that no further perfection is required after the suрplementary receiver’s lien had been created. Wisconsin’s supplementary proceedings law is based upon that of New York,
2
where the courts have directly confronted this issue.
In re Neptune Ave. & Emmons Ave.,
*939
The supplementary receiver has cited
In re Prior,
The date of perfection cannot be moved back to when the receiver’s hen was created under the “relation back” doctrine in order to withstand a preferential attack. The date of perfection, for purposes of applying § 547, is controlled specifically and solely by § 547(e)(2).
In re Holloway,
Self-perfecting, and therefore secret, hens should be the exception, not the rule. Long ago, the Wisconsin Supreme Court in
Wilson v. Rudd,
One of the stipulated issues to be addressed by this court is the effect, if any, of the two-year statute of limitations under 11 U.S.C. § 546(a). Under the version of § 546(a) apphcable here, 4 an action for recovery of a preference may not be commenced more than two yеars after the appointment of a chapter 7 trustee. Trustee Waud did not commence a preference avoidance action, and the two-year statute of limitations under § 546(a) has expired. The question is whether § 546(a) now bars Waud from using his avoidance powers.
The majority view holds that § 546(a) does not bar a defensive rehanee by the trustee.
In re Coan,
The minority position is that, where the two-year statute of limitations had expired, a trustee can no longer challenge the validity
*940
of the lien as a preference for any purpose.
Marketing Resources Intern. Corp.,
This court aligns itself with the majority view. A careful reading of § 546(a) leads to the conclusion that § 546(a) only applies where a bankruptcy trustee is seeking recovery of money or prоperty as a preferential transfer. That is not what is involved in this ease, where Waud is using his avoidance powers under § 547 defensively.
CONCLUSION
No authority exists in Wisconsin, either by statute or case law, which directly deals with whether perfection of a state court supplementary receiver’s lien is required after such lien is created and, if so, how suсh perfection is accomplished. New York, upon which Wisconsin’s supplementary proceeding statute is based, has addressed this precise issue and holds that such lien is not self-perfecting. Under New York law, which Wisconsin courts would follow, as persuasive authority, appointment of a supplementary receiver and/or the obtaining of a turnover order must occur before a supplementary receiver’s lien is valid against a creditor on a simple contract who acquires a judicial lien. Until then, the supplementary receiver’s hen is inchoate and not perfected. From a bankruptcy perspective, the New York rulings make sense and are in accord with the policy against secret hens. Because Mann’s appointment as a supplementary receiver on behalf of Emerald and the turnover order issued by Court Commissioner Hemmer both occurred on December 17, 1991—within the 90-day preference period — the supplementary receiver’s hen constitutes an аvoidable preference and is subordinate to the interest of Trustee Waud as a preference.
Mann s interest is therefore relegated to the status of a general unsecured creditor, and his motion for turnover is denied. 5
Notes
. Wherever reference is made in this decision to “receiver’s lien,” “Mann’s lien,” "Emerald lien,” or "supplementary receiver’s lien,” all such references are to the lien held by Mann as supplementary receiver on behalf of Emerald.
. Wisconsin adopted its first code of procedures from New York’s Field Code in 1856.
See Gould v. Jackson,
. It is not clear from the New York decisions in Neptune Ave. & Emmons Ave. and Livingston if both the appointment of a supplementary receiver and turnover order or if either of these requirements satisfies perfection in New York. In the case at bar, it is a moot point, since Mann’s appointment as supplementary receiver and the turnover order arising out of the supplementary proceedings both occurred on December 17, 1991 — within the 90-day preference avoidance period. Whether these steps are all that are required to satisfy perfection of the supplementary receiver's lien in Wisconsin need not be addressed here.
. On October 22, 1994, § 546(a) was amended by the Bankruptcy Reform Act of 1994, Pub.L. 103-394. It now provides that preference actions must begin within two years of the order fоr relief or one year after the appointment of a trustee, whichever is later. The amended version, however, only applies to cases filed after that date and does not apply in this case.
. Fruehauf Trailer Corporation, another creditor, also obtained a default judgment against Badger, and Mann had beеn appointed supplementary receiver on behalf of Fruehauf. This court’s reasoning in its consideration of the Emerald lien applies with equal force to the Fruehauf lien. As a result, Fruehauf, like Emerald, holds a general unsecured claim. The Fruehauf lien was created on November 14, 1991 and was later perfected on Novеmber 19, 1991, when Mann was appointed receiver on behalf of Fruehauf. Because Mann’s appointment occurred within the 10-day relation back period, under § 547(e)(2)(B), the effective perfection date then became November 14, 1991. Because November 14, 1991 was 89 days before the petition in bankruptcy was filed, the Fruehauf lien is an avoidable preference and subordinate to the interest of Trustee Waud.