Credit Alliance Corp. v. Nixon MacHinery Co. (In Re Nixon MacHinery Co.)

MEMORANDUM

RALPH H. KELLEY, Bankruptcy Judge.

This proceeding concerns five machines sold by Nixon Machinery to various buyers. The buyers executed promissory notes to Nixon Machinery, and it retained security interests in the machines. Credit Alliance financed the sales. Nixon Machinery assigned its rights to Credit Alliance in return for payment but agreed to re-purchase the note of any defaulting buyer. All the buyers defaulted and Nixon Machinery repossessed the machines. Nixon Machinery filed a petition for reorganization under Chapter 11 of the Bankruptcy Code. 11 U.S.C. (1979). At the…