Fidelity Financial Services, Inc. v. Richard v. Fink, Trustee (522 U.S. 211)
U.S. Supreme Court · decided January 13, 1998 · Supreme Court Database (Spaeth)
- Citation
- 522 U.S. 211 · 118 S. Ct. 651
- Decided
- January 13, 1998
- Term
- October Term 1997
- Vote
- 9–0
- Majority author
- Justice Souter
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice Souter delivered the opinion of the Court. Although certain transfers made before the filing of a petition in bankruptcy may be avoided as impermissibly preferential, a trustee may not so displace a security interest for a loan used to acquire the encumbered property if, among other things, the security interest is “perfected on or before 20 days after the debtor receives possession of such property." 11 U. S. C. § 547(c)(3)(B). The question in this ease is whether a creditor may invoke this “enabling loan” exception if it performs the acts necessary to perfect its security interest more than 20 days after the debtor receives the property, but within a relation-back or grace period provided by the otherwise applicable state law. We answer no and hold that a transfer of a security interest is “perfected” under § 547(c)(3)(B) on the date that the secured party has completed the steps necessary to perfect its interest, so that a' creditor may invoke the enabling loan exception only by satisfying state-law perfection requirements within the 20-day period provided by the federal statute. HH On August 17, 1994, Diane Beasley purchased a 1994 Ford and gave petitioner, Fidelity Financial Services, Inc., a promissory note for the purchase price, secured by the new car. Twenty-one days later, on September 7, 1994, Fidelity mailed the application necessary to perfect its…
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