In re Diabetes America, Inc.
United States Bankruptcy Court for the Southern District of Texas
2012 WL 6694074 (2012)
Basile (creditor) lent Diabetes America (debtor), a Delaware-incorporated but Texas-based company, $150,000 secured by its assets, and perfected his security interest by filing a financing statement in Texas but never filed one in Delaware; when Diabetes America filed Chapter 11 and Basile asserted a secured proof of claim, the bankruptcy trustee moved for summary judgment arguing that Delaware law, as the debtor's state of incorporation, governed perfection, meaning Basile's interest was actually unperfected.
Whether the bankruptcy trustee has priority over a secured creditor with an unperfected security interest in the debtor's property under section 544 of the bankruptcy code.