The court-appointed receiver brought a motion to determine entitlement to the proceeds of the sale of a leased truck and past lease payments.
The respondent lessor had trespassed and seized the truck from the receiver without court approval.
The court found that while the lessor remained the owner of the truck and was entitled to past lease payments, its failure to sign a new security agreement or file a financing change statement after the original lessee's bankruptcy rendered its security interest unperfected.
The unperfected interest was subordinate to the receiver and secured creditors, so the lessor was ordered to pay the sale proceeds to the receiver, along with full indemnity costs due to its reprehensible self-help conduct.
