United States Seventh Circuit

Corporate-debtor's proceeds from lawsuit against its insurance broker for failure to obtain business-loss insurance are not considered "proceeds of collateral" under the UCC, and therefore the bank holding a security interest in debtor's damaged collateral was not entitled to proceeds from that lawsuit. Bank's secondary argument, that it is entitled to lawsuit's proceeds because it holds a security interest in all of debtor's commercial tort claims by virtue of provision in loan agreement, fails because the bank did not list the lawsuit among the "commercial tort claims" in which it holds a security interest.

Appellate Information

• Argued 11/04/2008
• Decided 12/30/2008
• Published 12/30/2008

Judges

• POSNER, Circuit Judge., Before POSNER, WOOD, and TINDER, Circuit Judges.

Court

• United States Seventh Circuit

Counsel

• For Appellees:
  
• Steven B. Towbin (argued), Gordon E. Gouveia (argued), Shaw, Gussis, Fishman, Glantz, Wolfson & Towbin, Chicago, IL, for Trustee, Plaintiff-Appellant, Cross-Appellee., Ralph J. Schindler, Jr. (argued), Chicago, IL, for Intervenor-Appellee, Cross-Appellant.