In re Mel Golde Shoes, Inc.
United States Court of Appeals for the Sixth Circuit
403 F.2d 658 (1968)
Johnson & Murphy Shoes, Inc. (Johnson) delivered a shipment of shoes to Mel Golde Shoes, Inc. (Golde) on credit. The next day, two of Golde's creditors levied attachments on Golde's entire inventory, making themselves lien creditors. Golde then filed for bankruptcy. Johnson filed a reclamation petition, arguing that because Golde was insolvent when it bought the shoes on credit, Johnson had the right to reclaim them ahead of the lien creditors. The bankruptcy judge and district court treated Johnson as merely a competing lien creditor and ranked its interest below the attaching creditors. Johnson appealed.
Whether a seller's right to reclaim goods sold on credit to an insolvent buyer is superior to the rights of a creditor holding a lien on those goods.