Northeast Bank v. Caterpillar Financial Services Corp. (In Re T & R Flagg Logging Inc.)

Memorandum of Decision

JAMES B. HAINES, JR., Bankruptcy Judge.

I. Introduction

Before me is a lien priority dispute between Northeast Bank (“Northeast”) and Caterpillar Financial Services Corp. (“Caterpillar”). Each asserts a senior position in four pieces of logging equipment purchased by T & R Flagg Logging, Inc., (“Flagg”) from Southworth-Milton, Inc., before Flagg filed for bankruptcy relief. As explained below, I find and conclude that Northeast’s blanket security interest in all Flagg’s assets trumps Caterpillar’s lien because, although it claims to do so, Caterpillar does not hold a…