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Absent Collusion, Transferees Of Funds In Deposit Account Have Priority Over The Claims Of Secured Lenders

LexisNexis (July 5, 2018, 2:16 PM EDT) -- In a recent bankruptcy decision from Florida, the court subordinated the claim of a secured lender to $200,000 in funds that were deposited into the debtor’s account, then paid out to the defendant’s counsel as a retainer. Relying on an important “take-free” rule found at UCC 9-332(b), the court gave priority to the debtor’s counsel over the secured lender. In particular, the court found no “collusion” between the debtor and his counsel in violation of the rights of the secured lender. We think the decision is...
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