![]() f) Examples (1) Under applicable state law, rights of trustee, as a hypothetical judicial lien creditor holding an execution returned unsatisfied, held superior to rights of purchaser of debtors' house holding unregistered deed. In re Commercial Western Finance Corp., 761 F.2d 1329 (9th Cir. ![]() e) Procedure: To avoid security interest under § 544(a), debtor must file adversary proceeding he cannot simply note his intent to avoid security interests within a plan. (2) Trustee's rights are determined as of date of filing therefore, if a secured creditor perfects at any time prior to bankruptcy, his interest may not be attacked under § 544(a). 1992) d) Time Considerations: (1) Unlike preferences and fraudulent conveyances, time restrictions are not imposed, i.e., transaction being challenged need not have occurred within any specified period prior to commencement of the case. See generally 4 Collier On Bankruptcy ¶ 544.02 at 544-11 (15th ed. c) Limitation: courts generally do not permit a trustee to avail himself of the rights of a specially favored creditor (e.g., mechanic's lienholder). ![]() 893 (1989)(status as bona fide purchaser for value conferred by § 544(a)(3) permits trustee to recover for estate property otherwise subject to a constructive trust for the benefit of partners defrauded by debtor) b) Application: the extent of a trustee's rights as a "perfect" lien creditor are measured by the substantive law (e.g., recording statutes U.C.C.) of the jurisdiction governing the property in question. § 544(a) a) Description: trustee has the power and status of a creditor, whether one exists or not, who: (1) extends credit to the debtor at the time of commencement of the case and obtains a judicial lien on all the debtor's property or (2) extends credit to the debtor at the time of commencement of the case and obtains an execution which is returned unsatisfied or (3) becomes a bona fide purchaser of real property at the time of commencement of the case.
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