Central Bank and Real Estate Owned, L.L.C., an Iowa Limited Liability Company v. Timothy C. Hogan, as Trustee of the Liberty Bank Liquidating Trust Liberty Bank, F.S.B. Iowa State Bank First State Bank Farmers Savings Bank Farmers Trust & Savings Bank And First Community Bank

APPEL, Justice.

In this case, we deal with the question of whether participation agreements in connection with a loan transaction transferred security interests in the underlying property or only a contractual right to the proceeds from the originating bank. For the reasons expressed below, we conclude that the participating agreements transferred security interests in the underlying property to the participating banks and that those security interests were perfected under article 9 of the Uniform Commercial Code (U.C.C.).

I. Factual and Procedural Background.

Between 2008 and 2009, Liberty Bank…