This Article attempts to describe what bankruptcy lawyers and judges most need to know about the Revised Article 9. (Of course, if bankruptcy judges and lawyers need to know it, a fortiori, secured creditors’ attorneys need to know it.)
At the top of the most-need-to-know list are Revised Article 9’s choice-of-law and filing rules. Section 544(a) of the Bankruptcy Code, the “trustee’s strong-arm” clause, permits the trustee (and debtor-in-possession) to avoid unperfected security interests. For many transactions, Revised Article 9’s choice-of-law provisions will change where the creditor must file to perfect its interest. Those who do not know about Revised Article 9 or more likely, those who do not understand its new choice-of-law rules, will be sitting ducks for the bankruptcy trustee. Avoidance of their interests won’t even be sporting (but it will be lucrative).
Michael G. Hillinger & Ingrid Michelsen Hillinger, 2001: A Code Odyssey (New Dawn for the Article 9 Secured Creditor), 106 Com. L. J. 105 (2001).