Legal Environment of Business 8th Edition by Henry Cheeseman

Exercise 1

Financing Statement PSC Metals, Inc. (PSC), entered into an agreement whereby it extended credit to Keystone Consolidated Industries, Inc., and took back a security interest in personal property owned by Keystone. PSC filed a financing statement with the state, listing the debtor's trade name, "Keystone Steel Wire Co.," rather than its corporate name, "Keystone Consolidated Industries, Inc." When Keystone went into bankruptcy, PSC filed a motion with the bankruptcy court to obtain the personal property securing its loan. Keystone's other creditors and the bankruptcy trustee objected, arguing that because PSC's financing statement was defectively filed, PSC did not have a perfected security interest in the personal property. If this were true, then PSC would become an unsecured creditor in Keystone's bankruptcy proceeding. Is the financing statement filed in the debtor's trade name, rather than in its corporate name, effective? In re FV Steel and Wire Company, 310 B.R. 390, Web 2004 Bankr. Lexis 748 (United States Bankruptcy Court for the Eastern District of Wisconsin)