In the Matter of Gibson Products of Arizona, a Limited Partnership, Debtor. Arizona Wholesale Supply Co. v. George J. Itule

HUFSTEDLER, Circuit Judge:

On this appeal we must referee a collision between the “proceeds” provision of the Uniform Commercial Code (U.C.C. § 9-306(4), A.R.S. § 44-3127(D) 1 ) and the bank ruptcy trustee’s power to avoid preferences under Section 60 of the Bankruptcy Act. 2 The provisions collide under circumstances that place the creditor, asserting a perfected security interest in the debtor’s bank account, in the dimmest equitable light: If the creditor prevails, it receives $19,505.27 from the debtor’s account on proof that the debtor, within ten days of the insolvency, deposited $10 in…