The Secured Party and His Nemesis, the Trustee in Bankruptcy: After-Acquired Property, Unidentified Proceeds, and Selected Preference Problems

A trustee in bankruptcy, in addition to succeeding to the rights of the bankrupt,' has several avoiding powers. Some of these avoiding powers are based on practices which, like vice, are of "so frightful mien that to be hated [need] but to be seen." Preferences may not be included among such practices. Indeed, the English view exhibits ambivalence towards preferences. At one time it regarded "preferences [as] the good fortune of the creditor." A later view was "that the preferring of one creditor over others within a short time of bankruptcy and in contemplation thereof, was a 'fraud on the bankruptcy law' which could be required to be righted or undone." In the United States the voidability of preferences has been statutory, and the Statute with which this paper is concerned is the Federal Bankruptcy Act.

That Act provides that any preference as defined therein