In re Architectural Millwork of Virginia, Inc.
United States Bankruptcy Court for the Western District of Virginia
226 B.R. 551 (1998)
Relevant factsFree
Debtor Architectural Millwork (defendant) financed a Freightliner truck through a lease with Associates Leasing (plaintiff) that gave it an option to purchase at $9,625, tied to the truck's expected residual fair market value, and separately financed a Komatsu forklift under an agreement letting it purchase for just $1 at lease end; after Architectural filed Chapter 11, Associates moved to compel assumption or rejection of both agreements as leases (rather than disguised security agreements) and payment on them.
IssueFree
Whether an option to purchase leased goods at the end of the lease term automatically converts the lease into a security agreement.
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