In Re DILLARD FORD, INC., Debtor. William E. WOODRUM, Trustee, Plaintiff-Appellee, v. FORD MOTOR CREDIT CO., Defendant-Appellant

JOHNSON, Circuit Judge:

This bankruptcy adversary proceeding arises on direct appeal from the district court’s affirmance of the bankruptcy court’s finding that Ford Credit failed to properly perfect its security interest and that it violated the bankruptcy setoff rules. 118 B.R. 898.

I. STATEMENT OF THE CASE

A. Background Facts

In January of 1980, the debtor, Dillard Ford, entered into an inventory financing agreement with the appellant, Ford Credit. Ford Credit promised to loan Dillard Ford money to purchase new and used cars for its inventory. This inventory financing agreement included a…