Industrial Repair and Manufacturing, Inc Prosecutes Buckeye State Bank and First Security Bank of Nevada For Claim Worth $5.4M Involving Loan Indebtedness
May 14, 2021, Northern District of Ohio – Debtor Industrial Repair and Manufacturing, Inc. recently initiated a complaint against Buckeye State Bank and First Security Bank of Nevada to “avoid certain transfers, security interests, and liens under Sections 547, 544, and 506” of the Bankruptcy Code.
Allegedly, the Debtor was indebted to both the Defendants. The indebtedness to First Security Bank of Nevada (“FSBN”) was supposedly based upon a loan made to the Debtor in the principal sum of $2,780,000.00. (“FSBN Loan”). The indebtedness to the Buckeye State Bank (“BSB”) was allegedly based upon a loan made to the Debtor in the principal sum of $4,600,000.00. (“BSB Loan”). Both loans were guaranteed by the United States Small Business Administration and the United States Department of Agriculture. As consideration for the FSBN and BSB Loan, the Debtor granted to the Defendants a “security interest in substantially all its personal property”. The FSBN security interest was “perfected” by the filing of a UCC-1 with the Ohio Secretary of State. As additional security for the BSB Loan, the Debtor also granted to BSB a “mortgage and assignment of rents” concerning its real property.
The complaint alleges that the BSB financing statement was filed with the Ohio Secretary of State “within 90 days of the Debtor’s bankruptcy and satisfies all conditions under Sec. 547 (b)” of the Bankruptcy Code. The Debtor argues that the filing by BSB of the BSB financing statement is “avoidable according to §§ 547, 544”, and the avoided security interest be “preserved for the benefit of the bankruptcy estate under § 551”. The Debtor also seeks a determination from the court as to the validity, priority, and extent of any interests claimed by FSBN and BSB in the Debtor’s property, both its personal property and in its real property. The Debtor further argues that any interest claimed by BSB in the Debtor’s property, both personal property and real property, is an “unsecured claim” pursuant to§ 506(a) and is liable to be avoided and deemed “released” against the Debtor’s property per § 506(d).
The case is In re Industrial Repair and Manufacturing, Inc. in the United States Bankruptcy Court for Northern District of Ohio under case number – 21-30505. Honorable Judge Mary Ann Whipple of overusing the Debtors case. The law firm of Diller. & Rice is representing the Debtor/Plaintiff in its bankruptcy case.
Besides Industrial Repair and Manufacturing, Inc., multiple debtors IRM Express, LLC, ULD Logistics, LLC, BSL Transport Leasing Inc., Waterville-Monclova Properties, LLC have also sued the Defendant banks for claims involving the same loans in the separate bankruptcy cases.