In Re Ore Cargo, Inc., Bankrupt. Israel Discount Bank Limited v. Jacob Gottesman, Trustee in Bankruptcy of Ore Cargo, Inc.

IRVING R. KAUFMAN, Chief Judge:

The distinctive principles governing commercial transactions are not always reliable guides to the applicable standards for less orthodox credit agreements. Mindful of this distinction, we decline to extend the precepts of Article 9 of the Uniform Commercial Code to control the creation of security interests in tort claims. Specifically, we hold that a standard commercial security agreement, drafted with reference to the Code and accepted by the lender without knowledge of the existence of a tort claim arising from a nautical accident, did not convey a security…