Hope v. Acorn Financial Inc

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Debtor purchased a car from TCL Auto Sales and financed the purchase through Acorn. Debtor then filed for bankruptcy on July 21, 2010. Acorn did not perfect its security interest in the vehicle until July 27, 2010. The court concluded that, where, as here, a Chapter 13 trustee was aware of defects in a creditor's security interest well before confirmation, and chose not to object to the creditor's claim, and affirmatively recommended to the bankruptcy court that it confirm a proposed plan in which the creditor is given a secured position, the bankruptcy court's confirmation of the plan binds the trustee and precluded a post-confirmation avoidance action against the creditor. Accordingly, the court affirmed the decision of the bankruptcy court and the district court granting summary judgment in favor of Acorn. View "Hope v. Acorn Financial Inc" on Justia Law