Expeditors International of Washington, Inc. v. The Liquidating Trust
United States Bankruptcy Court for the District of Colorado
313 B.R. 473 (2004)
Expeditors International (defendant) held a security interest, perfected by possession, in goods belonging to Schwinn Cycling and Fitness (plaintiff). Shortly before Schwinn filed for Chapter 11 bankruptcy, Expeditors returned the goods to Schwinn, which then sold them, but Expeditors never filed a financing statement within the 20-day window UCC section 9-312(f) allows after relinquishing possession. Schwinn deposited the sale proceeds into a segregated cash-collateral fund, and Expeditors claimed its original possession-based perfection had become permanent once Schwinn filed for bankruptcy, so no further filing was needed.
Whether a creditor's temporary perfection of a security interest is rendered permanent by the debtor's filing of a bankruptcy petition.