Brenda P. Helms v. Certified Packaging Corporation

After Sarah Michaels, Inc. went bankrupt, its bankruptcy trustee, Brenda Helms (plaintiff), won a $2 million default judgment against Certified Packaging (defendant). LaSalle Bank (later assigned to CPC Acquisition) held a security interest in Certified's equipment from an earlier loan. After a fire damaged Certified's property, Certified settled a claim against its insurance broker Rothschild for $88,000 over the broker's failure to secure business-loss coverage, and separately sued utility company Com Ed, seeking $2 million with about 10% tied to property damage and the rest to business losses. When Helms tried to collect her judgment, LaSalle claimed its security interest reached both lawsuits' proceeds; the bankruptcy and district courts split on how to allocate the Rothschild settlement and Com Ed claim between Helms and LaSalle, leading to cross-appeals.

Whether compensation for business losses resulting from damage to collateral constitutes proceeds of that collateral under the Uniform Commercial Code.