AuthorDavid J. Cook
This book covers lots of ground. Insolvency incorporates bankruptcy, which
is federal law, and assignments for the benefit of creditors, bulk sales, receiv-
erships, workouts, and probates, which are creatures of state law. Victim
and licensee funds, bonds, and uninsured workers’ compensation funds are
creatures of both federal and state law.
Most of the law discussed in this book is available online. Having a copy
of the bankruptcy code at hand can be helpful but is not required. Referring
to Article 9 of the Uniform Commercial Code likewise can be helpful. (The
bankruptcy code, bankruptcy rules, and the entirety of the Uniform Com-
mercial Code are online.) Many attorneys offer helpful online articles that
explain the minutiae of bankruptcy and the Uniform Commercial Code. The
United States Bankruptcy Court (N.D. CA) offers an online, well organized
summary of case law.
This book offers you insight into what is not in written in the law.
An overarching theme of this book is that a secured creditor who has
properly filed (or recorded) the financing statement might well survive any
challenge in an insolvency proceeding and even emerge unscathed. Con-
sider an unavoidable security to be the life preserver that enables the credi-
tor to quietly drift away from the sinking ship. A secured creditor includes a
creditor who has obtained an interest in the debtor’s property by virtue of
a consensual lien (UCC filing), or non consensual lien (judgment or attach-
ment lien or levy).
This book discusses bulk sales, which are the statutory procedure for
the sale of a business and are found in Article 6 of the UCC. Many states have
repealed or modified Article 6, which might seem to render this discussion
somewhat moot. However, California has retained the bulk sales act. Given
California’s status as a major marketplace, familiarity with Article 6 can be
helpful. Again, a perfected security interest protects the creditor because
the buyer, arising from a bulk sale, takes subject to the filed lien. Given multi-
state practice and retail stores domiciled in many jurisdictions, knowledge
of the bulk sales act is a necessity.
This book also discusses probates, which are virtually creatures of state
law—and particularly the state probate code. While states might offer differ-
ing probate code, many states follow the Uniform Probate Code. Likewise,
these proceedings do not trump, but take subject to, a valid security inter-
est. In addition, this book discusses workouts, which consist of payment
programs, extensions, pot plans, and discounts.
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