ORDER GRANTING THE PROVIDENT BANK’S MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on Defendant The Provident Bank’s (“Provident”) Motion for Summary Judgment, Supporting Memorandum, and Affidavits (Docs. 16, 17, 18, 19), Plaintiff Mitsubishi Consumer America, Inc.’s (“Mitsubishi”) Response (Doc. 21), Provident’s Reply (Doc. 22), and the parties’ Stipulation (Doc. 26). Oral arguments were heard on July 6,1998.
The Court has jurisdiction over this matter by virtue of 28 U.S.C. § 1334 and the general order of reference entered in this district. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(E).
This matter involves the competing claims of a reclaiming seller, Mitsubishi, and a secured creditor, Provident, in certain of the Debtor’s collateral valued at approximately $346,000.00 (“Merchandise”). Provident contends that due to its valid and perfected security interest 1 in the Merchandise, Mitsubishi’s reclamation claim should be denied. Mitsubishi contends that Provident is neither a lien creditor or a good faith purchaser as required under applicable state law. Mitsubishi also contends that even if Provident is a good faith purchaser, the rights of a reclaiming seller are superior to that of a perfected secured creditor. Lastly, Mitsubishi contends that even if Mitsubishi’s reclamation claim is subject to Provident’s security interest, Mitsubishi is entitled to an administrative claim in substitution for the return of the actual Merchandise. ■
Background and Operative Law
On or about October 22, 1975, Provident and the Debtor entered into a security agreement whereby the Debtor granted Provident a security interest in all of its present and after-acquired inventory. On September 24, 1997, the Debtor filed its chapter 11 petition. On September 29, 1997, Mitsubishi initiated the within adversary proceeding, alleging that from about September 12, 1997 to September 22, 1997, Mitsubishi sold the Merchandise to the Debtor on credit to which it was entitled to reclaim under 11 U.S.C. § 546(c). On October 3, 1997, the parties entered into an Agreed Order whereby the Debtor would be permitted to sell the Merchandise and the interests of the parties *10 would attach to the Merchandise as if the Merchandise had not been sold. See Doc. 7.
Summary judgment should be granted “if the pleadings ... show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c) made applicable through Bankruptcy Rule 7056. In order to preclude the granting of summary judgment, the non-moving party must show that there is doubt as to the material facts and that the record, taken as a whole, does not lead to judgment for the movant.
Street v. J.C. Bradford & Co.,
Section 546(c) of the Bankruptcy Code states as follows:
[T]he rights and powers of a trustee ... are subject to any statutory or common-law right of a seller of goods that has sold goods to the debtor, in the ordinary course of such seller’s business, to reclaim such goods if the debtor received such goods while insolvent, but (1) such a seller may not reclaim any such goods unless such seller demands in writing reclamation of such goods — (A) before 10 days after receipt of such goods; or (B) if such 10-day period expires after the commencement of the case, before 20 days after receipt of such goods by the debtor; and (2) the court may deny reclamation to a seller with such a right of reclamation that has made such a demand only if the court — (A) grants the claim of such a seller priority as a claim of a kind specified in section 503(b) of this title; or (B) secures such claim by a lien.
This code section preserves reclamation rights as they exist outside of bankruptcy and under state law.
E.g., In re Victory Markets, Inc.,
The Rights Of A Reclaiming Seller Are Subject To The Rights of A Perfected Secured Creditor
The courts in this circuit, as well as others, have overwhelmingly concluded that a holder of a perfected floating lien on inventory qualifies as a good faith purchaser with rights superior to that of a reclaiming seller.
See In re Marko Electronics, Inc.,
We choose to follow the well-reasoned majority position that a perfected secured credi
*11
tor is good faith purchaser and thus has priority over a reclaiming seller.
3
This holding is supported by Ohio Revised Code § 1301.0KFF) (UCC 1-201(32)) which defines the term “purchase” to include “taking by ... mortgage, pledge, lien ...”
See In re Bensar Co.,
The courts are less clear, however, on the issue of good faith. Some courts conclude, with little analysis, that a perfected secured creditor has good faith.
E.g., Lavonia Manufacturing Co. v. Emery Corp.,
Given the permeating requirement of good faith throughout the UCC, we choose to follow the latter group of cases.
See Gran-iteville Co.,
To this end, a perfected secured creditor who enforces a security agreement in a manner consistent with the clear terms thereof and the expectations of the parties is acting in good faith.
In re M. Paolella & Sons, Inc.,
Citing
In re M. Paolella & Sons, Inc.,
Mitsubishi has set forth no substantive allegations that would place Provident’s good faith at issue. Mitsubishi states only that it would “like to be informed” about the extent Provident’s control over the Debtor’s financial affairs, whether Provident acted within its rights under its agreements with the Debtor, and the extent to which Provident’s actions could have led to the filing of the bankruptcy petition.
See
Doc. 21, p. 15. This Court finds it inappropriate to allow a reclaiming seller to embark on a “fishing expedition” against a perfected secured creditor in the hopes of uncovering evidence which might place the perfected secured creditor’s good faith into question. Rather, we find that the reclaiming seller must show some basis upon which to question the secured creditor’s good faith.
See Graniteville Co.,
Accordingly, since there is no genuine issue of material fact as to the perfected status of Provident’s security interest in the Merchandise, we hold that Mitsubishi’s rights as a reclaiming seller are subject to Provident’s rights as a perfected secured creditor in the Merchandise.
Mitsubishi May Be Entitled To An Administrative Claim
There is also disharmony among the courts as to the remedy for a reclaiming seller whose rights are found to be subordinate to those of a perfected secured creditor. Some courts have held that where reclamation is denied, the reclamation seller is entitled to an administrative priority claim or a lien in the full amount of the reclamation claim, based upon the language of § 546(c)(2).
See Sunstate Dairy & Food Products, Inc.,
We choose to follow the well-reasoned line of cases which hold that the reclaiming seller is entitled to an administrative claim in any surplus proceeds remaining after the perfected secured creditor’s interest has been satisfied or released.
See In re Video King of Illinois, Inc.,
Accordingly, to the extent that there are any surplus proceeds 4 from the sale of the Merchandise remaining after Provident’s security interest has been satisfied, Mitsubishi shall have an administrative claim on said surplus. The balance of Mitsubishi’s claim shall be treated as a general unsecured claim.
*13 Based upon the foregoing, Provident’s motion for summary judgment is hereby GRANTED.
IT IS SO ORDERED.
Notes
. Subsequent to this Court's earlier Order Denying Motion for Summary Judgment (Doc. 23), the parties entered into a Stipulation as to the perfected status of Provident's security interest in the Merchandise (See Doc. 26). Provident raises other defenses in its Answer which are not at issue for purposes of this motion.
. Ohio has not adopted the 1966 amendment to the UCC which eliminated the phrase "or lien creditor.”
See In re Marko Electronics, Inc.,
. In view of this holding, it is not necessary to address Mitsubishi’s argument that Provident is not a lien creditor under UCC 2-702(3).
. The parties have not presented this evidence to the Court within the context of this motion for summary judgment.