Ring v. First Niagara Bank, N.A. (In the Matter of Sterling United, Inc.)

Even if location is wrong, financing statement is sufficient by saying ‘all assets.’

- Rochelle Quick Take

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Case Type:
Case Status:
15-4131 (2nd Circuit, Dec 22,2016) Not Published

the Second Circuit affirmed the rulings of the bankruptcy and district courts, dismissing a case filed by a chapter 7 trustee seeking to avoid as a preference the lien of a bank on grounds that it was not properly perfected.  The trustee claimed that the financing statements filed only covered assets at a certain location from which the debtor had moved. The court read the financing statement as covering all assets and the address limitation as merely illustrative of a smaller subset of assets.

Procedural context:

Both the bankruptcy and the district court ruled against the trustee, dismissing the action.


The facts all relate to interpretation of the language used in the financing statement.  The trustee argued that the phrase "all assets, including, but not limited to...  and located at or relating to the operation of the premises at 100 River Rock Drive..." should be limited only to the assets in that location.  The court disagreed, noting that the second part of the conjuctive phrase did not modify the words "all assets" but rather the smaller illustrative subset that followed the words "including, but not limited."

Calabresi, Raggi and Lynch

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