In a secured transactions priority appeal arising from a corporate reorganization and competing claims to accounts receivable, the appellant challenged the trial judge's findings respecting the validity and extent of security interests.
The court adopted the trial judge's reasons and held there was ample evidence supporting a valid security interest and that the appellant's purchase-money security interest had priority only to the extent traceable proceeds remained identifiable.
Once receivables were paid into the debtor's general bank account, the proceeds could no longer be traced and the security interest was extinguished.
The appeal was allowed only to award pre-judgment and post-judgment interest on approximately $66,000 already recovered, and was otherwise dismissed with costs.
