City of Boerne v. Boerne Hills Leasing Corp. (In Re Boerne Hills Leasing Corp.)

LITTLE, District Judge:

This bankruptcy appeal is essentially a priority dispute between the lien claims of, on the one hand, the Chrysler Credit Corporation (“Chrysler”) and, on the other, certain taxing units of the State of Texas: the City of Boerne, Kendall County, and the Boerne Independent School District (collectively, the “taxing units”). The bankruptcy court concluded that Chrysler had a superior claim to the proceeds of sale of the debtor’s property. On appeal, the district court affirmed. We reverse.

I

Chrysler and the taxing units held liens on the inventory of the debtor, the Boerne…