Section 6.18 Security Interests in Inventory or Receivables

• Library: Bankruptcy Practice (2007 Ed. + 2015 Cum Supp)

5. (§6.18) Security Interests in Inventory or Receivables

Under 11 U.S.C. § 547(c)(5), there is a defense for a secured creditor with a security interest or “floating lien” on the debtor’s inventory or receivables. The trustee may not avoid the creation of a perfected security interest in inventory, receivables, or the proceeds of either, except to the extent that the creditor’s position, measured by its unsecured deficiency, has improved during the preference period to the detriment of other creditors...