McCannon v. Marston

OPINION OF THE COURT

GIBBONS, Circuit Judge:

Among the provisions of the Bankruptcy Reform Act of 1978,11 U.S.C. § 101 et seq. (Supp. Ill 1979) (the Code), that require reference to state law is the “strong arm clause” of Section 544. This section grants the trustee the state law defined rights and powers of certain creditors and transferees of property. In this case, both the bankruptcy and district courts interpreted the language of the Code to permit a trustee to avoid an equitable interest in real property (arising from a purchase agreement) of a person whose possession of that property…