The Honorable Ortrie D. Smith, United States District Judge 1

for the Western District of Missouri, affirming the decision of

the Honorable Frank W. Koger, Chief Judge, United States

Bankruptcy Court for the Western District of Missouri.

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No. 96-1430

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In re: Denise Renee Beasley, *

 *

Debtor, *

 *

-------------------- *

 * Appeal from the United States

Richard V. Fink, Trustee, * District Court for the

 * Western District of Missouri.

Appellee, *

 * [UNPUBLISHED]

v. *

 *

Fidelity Financial Service, Inc.,*

 *

Appellant. *

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 Submitted: October 30, 1996

 Filed: November 27, 1996

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Before BEAM, HANSEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

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PER CURIAM.

Fidelity Financial Services, Inc. ("Fidelity") appeals the district

court's affirmance of the bankruptcy court's order setting aside

1

Fidelity's lien on the debtor's car as a voidable preference. The

bankruptcy court's ruling depended on its conclusion that state relationback statutes are inapplicable to preference-avoidance analysis under 11

U.S.C. § 547(c)(3)(B). This is an issue of first impression in this

circuit. In agreement with
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the position of the Ninth Circuit, we now hold that state relation-back

periods do not apply to section 547 analysis.

Section 547(b) of the Bankruptcy Code ("Code") allows a trustee in

bankruptcy to avoid certain prepetition payments and transfers of a

debtor's property as "preferential transfers." Not all preferential

transactions are voidable under section 547(b), however. As relevant here,

section 547(c)(3)(A) provides an exception for interests securing new

value. Section 547(c)(3)(B) allows a creditor a twenty-day grace period

in which to perfect an interest securing new value and thereby protect the

interest from the trustee's preference-avoidance powers. 

Under section 547(e)(1)(B), "a transfer of a fixture or property

other than real property is perfected when a creditor on a simple contract

cannot acquire a judicial lien that is superior to the interest of the

transferee." Under Missouri law, if an interest in a vehicle is perfected

within thirty days of the purchase, the perfection will be considered

effective as of the date of purchase. Mo. Rev. Stat. § 301.600.2 (1994).

According to the parties' stipulation, Fidelity fulfilled state

requirements for perfecting its interest in the car twenty-one days after

debtor purchased it. The issue in this case is whether Missouri's thirtyday relation-back statute applies in determining whether Fidelity perfected

its interest within the grace period provided by the Code.

The Ninth Circuit has concluded that state-law relation-back periods

are inapplicable to preference-avoidance analysis. In re Loken, 175 B.R.

56, 61 (B.A.P. 9th Cir. 1994), cited with approval in Fitzgerald v. First

Sec. Bank of Idaho (In re Walker), 77 F.3d 322, 322 (9th Cir. 1996). The

court reasoned that the Code's unambiguous definition of perfection

required it to determine at what point a judicial lienholder is barred from

obtaining rights superior to those of a transferee. 175 B.R. at 61-62.

It held
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that such a bar arises "when the transferee takes the last step required

by state law to perfect its security interest," and until then, "it is not

possible to say that other creditors `cannot' obtain superior rights." Id.

at 62. The court concluded that determining perfection without reference

to state grace periods is consistent with Congress's desire to have "a

uniform rule throughout the country." Id. at 62-63.

We find this reasoning persuasive. Accordingly, we affirm the

judgment of the district court. 

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.