Bergquist v. Cessna Finance Corp. (In re A.E.F.S., Inc.)
Docket: Bankruptcy No. 3-83-931; Adv. No. 3-83-505
Court: District Court, D. Minnesota; May 8, 1984; Federal District Court
The Court granted summary judgment in favor of the plaintiff, the trustee, regarding the avoidability of a preferential transfer to Cessna Finance Corporation (CFC) under 11 U.S.C. § 547(b). Both parties acknowledged that CFC received a preferential transfer but disputed whether it was avoidable. The trustee argued that CFC’s security interest, perfected two months after the debtor purchased the airplane, did not meet the exceptions outlined in 11 U.S.C. § 547(c)(3) (10-day security interest exception) and § 547(c)(1) (substantially contemporaneous exchange). The Court examined the relevant facts: the debtor bought the airplane on January 7, 1983, and CFC perfected its security interest by filing a conditional sales contract on March 7, 1983. The debtor filed for Chapter 7 bankruptcy on May 23, 1983. The Court concluded that CFC's perfection did not comply with the 10-day requirement of § 547(c)(3)(B), which is specific to security interests. The Court supported the trustee's position, referencing case law that clarified the exclusivity of the § 547(c)(3) exception for security interest transactions. Consequently, the Court denied CFC's motion for summary judgment and granted the trustee's motion, declaring CFC’s security interest in the airplane null and void, and ordered CFC to execute necessary documents to extinguish its interest with the Federal Aviation Administration.