MEMORANDUM AND ORDER
On May 30, 1975, Bankruptcy Judge Goldhaber entered an Order in this Chapter XI proceeding ruling that certain financing and continuation statements filed by the First National Bank of Boston (Bank) created and maintained a perfected status for Bank's present security interest in accounts receivable and other assets of the Debtor, Gilchrist Company, as recited in the financing and continuation statements. Gilchrist Company and the Receiver filed the instant appeal.
While this appeal was pending, Gilchrist and its creditors entered into a Plan of Arrangement. The Plan has been confirmed by the Bankruptcy Judge, but an appeal has recently been filed by some creditors from the Order of Confirmation. That appeal is presently pending. In view of the confirmation of the Plan, the Receiver's responsibilities have concluded except for the ministerial role of disbursing to the creditors the funds held by the Court. If, however, the confirmation of the Plan is upset on appeal, the Receiver will be restored to full powers and, in such event, will have an interest in whether these assets are subject to Bank's security interest or not. For that reason, the Receiver remains on the record in this appeal, although he has not participated in the briefing or argument.
The matter presently on appeal before me has been fully briefed by counsel for Gilchrist and for the Bank. Upon consideration of the briefs, oral argument and after careful review of the record before the Bankruptcy Court, I am satisfied that the ruling was correct and the Order appealed from will be affirmed on Bankruptcy Judge Goldhaber's opinion (copy of which is attached hereto) with these few additional comments.
Counsel for Gilchrist points to the fact that the Bankruptcy Judge did not discuss, and therefore urges that he must have failed to consider, two cases cited and relied upon by Gilchrist: Wilmor Finishing Corp., Bankruptcy No. 66-1302 (D. Mass. 1968), and Commerce Union Bank v. Hunley, 10 UCC Rep. Serv. 1252 (Tenn. Ct. App. 1972). Gilchrist contends that Wilmor is particularly significant, indeed that it is "binding," since it interpreted Massachusetts law, and the parties here have stipulated that Massachusetts law is applicable. Neither Wilmor nor Commerce Union Bank affords any basis for upsetting Bankruptcy Judge Goldhaber's well reasoned ruling.
In Wilmor the Bankrupt, in 1964, financed the purchase of two pieces of equipment with the lender, who perfected a security interest in the equipment. In 1965, the Bankrupt financed the purchase of three more pieces of equipment with the lender, who perfected a security interest therein. In June 1966, the Bankrupt paid in full the obligation stemming from the 1964 purchase, but did not demand a termination statement from the lender and none was filed. In July 1966, the Bankrupt refinanced the obligation arising under the 1965 purchase, which was then in default. Under the refinancing agreement, the lender was granted a security interest in all five pieces of equipment, but the lender failed to perfect that security interest because of incomplete filing. The lender then attempted to resort to the 1964 filing to obtain priority over the Trustee. The Bankruptcy Judge, without citation of authority, denied lender's petition to reclaim the three pieces of equipment purchased in 1965, stating only the following:
"Massachusetts General Laws Annotated, Chapter 106, Section 9-404. Termination Statement provides:
(1) Whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must on written demand by the debtor send the debtor a statement that he no longer claims a security interest under the financing statement, which shall be identified by file number.