Abstract
There are two plausible readings of Bankruptcy Code § 542(a). Whiting Pools read § 542(a) to reflect the colloquial understanding of ""property"" as thing. Courts applying Whiting Pools' reasoning to security interests hold that a secured creditor who has repossessed goods, but not yet sold them at foreclosure, must deliver (turn over) possession of the goods to a debtor who files for bankruptcy or to the bankruptcy trustee. By contrast, Professor Plank argues that § 542(a) uses the specialist's understanding of property. This reading of § 542(a) compels the conclusion that a creditor who, at the time the debtor files for bankruptcy, has repossessed goods is not (without more'46) obligated to relinquish possession of those goods. The Eleventh Circuit's federal law holding in Lewis implicitly adopts Plank's reading of § 542(a). The split in the case law created by Lewis is significant, in the practical sense, because there many cases in which debtors file for Chapters 11, 12 or 13 bankruptcy shortly after repossession by an undersecured creditor. Furthermore, the split in the case law created by Lewis is significant, in the conceptual sense, because it turns on whether an important federal statute, § 542(a), embodies one or another understanding of what may be the most fundamental concept in all law, property. It is time for courts to stop being led astray by irrelevant state law differences and to engage Lewis's federal law holding on the merits. Perhaps other courts will do this, there will be a discussion about the merits of the two views, and, hopefully, the better one will prevail in the case law. If this discussion and convergence among courts does not occur, then the United States Supreme Court will have to impose convergence from the top.
Recommended Citation
Ware, Stephen J.
(2002)
"Security Interests, Repossessed Collateral, and Turnover of Property to the Bankruptcy Estate,"
Utah Law Review: Vol. 2002:
No.
4, Article 5.
Available at:
https://dc.law.utah.edu/ulr/vol2002/iss4/5