Photo: Lightfield Studios/Adobe Stock Judgment Lienholders Versus UCC Lienholders: Who Wins When It Comes to Cash?
Judgment creditors frequently encounter difficulties enforcing their judgments against debtors, particularly those in distressed circumstances. A recent decision by the Court of Appeals of Ohio in 'Wulco v. The O'Gara Group & Monroe Capital Partners Fund' involved a battle between a judgment creditor and a UCC secured creditor, each seeking to obtain funds in a debtor's bank account. The court examined not only the relative rights of the creditors as to those funds, but also whether a court clerk to whom the funds were transferred (as part of garnishment proceedings) could be a "transferee" under Section 9-332 of the Uniform Commercial Code, thereby stripping away any prior security interest.
December 06, 2023 at 10:00 AM
12 minute read
Creditors' and Debtors' Rights
Judgment creditors frequently encounter difficulties enforcing their judgments against debtors, particularly those in distressed circumstances. A recent decision by the Ohio Court of Appeals in Wulco v. The O'Gara Group & Monroe Capital Partners Fund, 2023 WL 7292951 (Ohio Ct. App. Nov. 6, 2023), involved a battle between a judgment creditor and a UCC secured creditor, each seeking to obtain funds in a debtor's bank account. The court examined not only the relative rights of the creditors as to those funds, but also whether a court clerk to whom the funds were transferred (as part of garnishment proceedings) could be a "transferee" under Section 9-332 of the Uniform Commercial Code, thereby stripping away any prior security interest.
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