CopyCited 7 times | Published | Court of Appeals for the Eleventh Circuit | 71 U.C.C. Rep. Serv. 2d (West) 302, 2010 U.S. App. LEXIS 5452, 52 Bankr. Ct. Dec. (CRR) 258, 2010 WL 918058
...material issue of fact remains regarding whether the funds it received from
Debtor actually constituted CapitalSource’s cash collateral. Principally,
Marathon argues that the funds did not constitute CapitalSource’s cash
collateral under Fla. Stat. § 679.332(2) (a replica of U.C.C....
...§ 9-332(b)),
which provides that “[a] transferee of funds from a deposit account takes
the funds free of a security interest in the deposit account unless the
transferee acts in collusion with the debtor in violating the rights of the
secured party.” Fla. Stat. § 679.332(2)....
...Relying on this Florida law,
Marathon contends upon receipt of the funds they became free of
8
CapitalSource’s security interest and, therefore, the funds were not cash
collateral. 1
Despite Marathon’s contentions otherwise, Florida’s Section
679.332(2) does not alter the fact that CapitalSource had a security
interest in Debtor’s deposit account funds as proceeds of CapitalSource’s
properly secured collateral while they were in Debtor’s hands....
...In response, Cohen argues Marathon did not raise this argument before the
bankruptcy or district courts. Marathon responds it consistently argued in both courts
that it received Debtor’s funds free of a security interest, which it claims encompasses
its Section 679.332(2) argument. After reviewing all of the briefing before the
bankruptcy and district courts, we conclude Marathon never even mentioned Section
679.332(2) or its U.C.C. equivalent, U.C.C. § 9-332(b), let alone made the argument
that upon its receipt of the controverted funds the funds were free of CapitalSource’s
security interest because of Section 679.332(2) and, therefore, were not cash collateral
as defined by 11 U.S.C....
...Therefore, those cash proceeds
constituted cash collateral as defined by 11 U.S.C. § 363(a), and pursuant
to 11 U.S.C. § 363(c)(2), Debtor could not transfer them to anyone
without the authorization of CapitalSource or the bankruptcy court.
Marathon correctly notes that under Fla. Stat. § 679.332(2) after Debtor
transferred the funds to it, the funds in its hands were no longer subject to
CapitalSource’s security interest....
CopyCited 2 times | Published | District Court, M.D. Florida | 2013 WL 132581, 2013 U.S. Dist. LEXIS 3996
...Case Co.,
749 F.2d 1526, 1529 (11th Cir.1985) (quoting Fla. Stat. §
679.3151 , cmt. 2, which provides that a secured party may “repossess the collateral from the transferee or, in an appropriate case, maintain an action for conversion .... ”)). However, under U.C.C. § 9-332, codified at Fla. Stat. §
679.332 , an innocent *1238 transferee of money or funds from a deposit account takes the money or the funds free of any security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party....
CopyPublished | Court of Appeals for the Eleventh Circuit
...material issue of fact remains regarding whether the funds it received from
Debtor actually constituted CapitalSource’s cash collateral. Principally,
Marathon argues that the funds did not constitute CapitalSource’s cash
collateral under Fla. Stat. § 679.332(2) (a replica of U.C.C....
...§ 9-332(b)),
which provides that “[a] transferee of funds from a deposit account takes
the funds free of a security interest in the deposit account unless the
transferee acts in collusion with the debtor in violating the rights of the
secured party.” Fla. Stat. § 679.332(2)....
...Relying on this Florida law,
Marathon contends upon receipt of the funds they became free of
8
CapitalSource’s security interest and, therefore, the funds were not cash
collateral. 1
Despite Marathon’s contentions otherwise, Florida’s Section
679.332(2) does not alter the fact that CapitalSource had a security
interest in Debtor’s deposit account funds as proceeds of CapitalSource’s
properly secured collateral while they were in Debtor’s hands....
...In response, Cohen argues Marathon did not raise this argument before the
bankruptcy or district courts. Marathon responds it consistently argued in both courts
that it received Debtor’s funds free of a security interest, which it claims encompasses
its Section 679.332(2) argument. After reviewing all of the briefing before the
bankruptcy and district courts, we conclude Marathon never even mentioned Section
679.332(2) or its U.C.C. equivalent, U.C.C. § 9-332(b), let alone made the argument
that upon its receipt of the controverted funds the funds were free of CapitalSource’s
security interest because of Section 679.332(2) and, therefore, were not cash collateral
as defined by 11 U.S.C....
...Therefore, those cash proceeds
constituted cash collateral as defined by 11 U.S.C. § 363(a), and pursuant
to 11 U.S.C. § 363(c)(2), Debtor could not transfer them to anyone
without the authorization of CapitalSource or the bankruptcy court.
Marathon correctly notes that under Fla. Stat. § 679.332(2) after Debtor
transferred the funds to it, the funds in its hands were no longer subject to
CapitalSource’s security interest....
CopyPublished | United States Bankruptcy Court, S.D. Florida. | 2016 Bankr. LEXIS 4546, 63 Bankr. Ct. Dec. (CRR) 155
...U.C.C, Article 9, section 9-332, uniformly enacted in the states, provides that a transferee of money, or funds from a deposit account, takes free of any security interest “unless the transferee acts in collusion with the debtor in violating the rights of the secured party.” E.g., Florida Statutes § 679.332....
...There is no cash collateral interest that might be entitled to adequate protection. Armstrong Bank’s objection should be overruled and the Firm is entitled to apply the retainer in payment of fees and expenses approved by the Court. In this case, even if Florida Statutes § 679.332 did not answer the question, the Firm has a security interest in the pre-petition retainer senior to any security interest Armstrong Bank might claim....
...The Debtor and the Firm executed an engage *913 ment agreement that serves as a security agreement. All of the other requirements for attachment of that security interest are satisfied. The Firm’s security interest in the pre-petition retainer is perfected by possession. Absent the effect of Florida Statutes § 679.332, Armstrong Bank might claim to have a security interest in the pre-petition retainer as proceeds of a deposit account subject to its security interest....
...Accordingly, Armstrong Bank argues that the Debtor may not use the Pre-Petition Retainer to pay the Firm’s attorney’s fees and expenses. The Firm responds that it is a non-collusive transferee of the funds representing the Pre-Petition Retainer and that, under Florida Statutes § 679.332, Armstrong Bank has no interest in the Pre-Petition Retainer that may constitute cash collateral....
...All of the requirements for attachment of a security interest under Florida Statutes §
679.2031 are met. The Firm’s security interest in the Pre-Petition Retainer is perfected by possession. 6 *916 Armstrong Bank has no interest whatsoever in the Pre-Petition Retainer. Florida Statutes §
679.332(2) provides: “A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the transferee acts in collusion with the debtor in violating the rights of the secured party.” Armstrong Bank does not even suggest that the Firm was involved in collusion....
