Case Law Stands Firm Granting Priority To Judgment Creditor As “Transferee” Of Funds In The Debtor’s Deposit Account

LexisNexis (May 18, 2020, 11:56 AM EDT) -- If a debtor has granted a consensual security interest in the funds in its deposit account to a secured lender, does the lender have priority over the claims of a judgment creditor who later levies against the funds in the deposit account? One leading decision is a 2016 case from a California federal district court. The court gives priority to the judgment creditor under the rules of Article 9. The decision thoughtfully resolves the priority issue based on the language and policies behind UCC 9-332(b). More recent case law stands firmly behind the California case....