Pegasus Debenture Committee v. Knupp (In Re Pegasus International Travel Club)

MEMORANDUM AND ORDER DENYING SECURED STATUS

THOMAS WOOD, Bankruptcy Judge.

In this dispute the creditors of the debtor in bankruptcy claim a security interest in the proceeds of one of the debtor’s assets which was sold following the commencement of bankruptcy. The trustee argues that the creditors did not have a perfected security interest in the asset and have no entitlement to the proceeds.

Pegasus International Travel Club, Inc., (Pegasus) executed a security agreement in favor of certain debenture holders granting them a. security interest in a Douglas DC-8-21 aircraft which was titled in…