Preferential Transfers on the Eve of the Bankruptcy Amendments
While secured lenders may have been content to ride the crest of judicial legislation, the only permanent solution to the problem lie in amending either the Bankruptcy Act, the Uniform Commercial Code, or both. This at least is the view taken by the National Bankruptcy Conference’s Committee on Coordination of the Uniform Commercial Code and Bankruptcy Act. Since its first meeting in June 1966, the Committee has focused its attention primarily upon the validity, in bankruptcy proceedings, of Article 9 security interests in after-acquired property. In September 1967, the Committee submitted to the Bankruptcy Conference its first draft of a revision of Section 60(a) of the Bankruptcy Act. This Draft was approved in terms of its “general approach.” Since that time the Draft has undergone significant modifications, and will doubtless undergo many more before it is finally submitted to Congress. Yet it is not premature to examine the general direction in which the Committee is moving. It would have been both unrealistic and impossible to “freeze” the 1966-1967 Committee discussion in order to examine its progress at a given point in time. At this point it would be more pertinent to focus upon the basic changes which have been proposed or considered for Section 60 by the Committee, some of which have already been incorporated into the Draft. This article will deal primarily with the Committee’s treatment of security interests in after-acquired property, but will also touch upon various proposed modification of Section 60 which do not directly affect the after-acquired property problem.