Harold McClellan sold ice-making machinery to Bobbie Cantrells brother for $200,000 to be paid in installment payments.
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Harold McClellan sold ice-making machinery to Bobbie Cantrell’s brother for $200,000 to be paid in installment payments. McClellan took a security interest in the ice machine but did not perfect it by filing a financing statement. The brother defaulted when he owed $100,000, and McClellan brought suit. With the suit pending, the brother “sold” the ice machine to Bobbie Cantrell for $10. Bobbie then sold the machine to someone for $160,000 and refused to explain what happened to that money. McClellan added Bobbie as a defendant in his suit against her brother. Bobbie then declared bankruptcy. McClellan sought to have the various transfers set aside. The trial court refused to do so, and McClellan appealed. Should the transfers be set aside? Why or why not? [McClellan v Cantrell, 217 F3d 890 (7th Cir)]
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There was no voidable preference Bobbie sold the machine at a time when s...View the full answer
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