M Credit Corp. v. Energy Contractors Inc. (In re Energy Contractors, Inc.)

ALVIN B. RUBIN, Circuit Judge:

A creditor appeals a bankruptcy court decision invalidating its purported security interest in the debtor’s accounts receivable for the lender’s failure to comply with the Louisiana Assignment of Accounts Receivable Act.1 Because we conclude that the lender substantially complied with the Act, we reverse the bankruptcy court and uphold the lender’s privilege.

I

Energy Contractors, Inc. (Energy) is a Louisiana corporation in the business of oil field construction. Between January 1983 and March 1984, Energy executed several promissory notes in favor of Mercantile…