Dunlop Tire Corp. v. Cycle Products Distributing Co. (In Re Cycle Products Distributing Co.)

MEMORANDUM & ORDER

KENNETH J. MEYERS, Bankruptcy Judge.

It is common for a business to have a creditor who advances products on a secured basis. The typical arrangement is for the creditor to advance inventory or supplies and then have a floating lien on the products and their cash proceeds to ensure payment. See 1A P. Coogan, W. Hogan & D. Vagts, Secured Transactions under UCC § 7.04[3][d], at 7-37. “A floating lien arrangement secures future advances under the same security agreement as of the time of the perfection of the original security agreement.” 79 C.J.S. Supp. Secured Transactions §…