Opinion ID: 491041
Heading Depth: 2
Heading Rank: 3

Heading: Operating Authorities

Text: 39 Freightliner held a perfected security interest in debtor's general intangibles 6 pursuant to the security agreement executed by the parties on August 2, 1986, and the subsequently filed financing statement. Based on that security interest, the bankruptcy court held that Freightliner had an interest superior to that of the Trustee in the proceeds of the sale of debtor's transportation operating authorities. The bankruptcy court reasoned that: 40 Given the fact that the operating rights in this case have, in fact, been transferred to the buyer's satisfaction, further inquiry into their transferability under ORS Chapter 767 and relevant provisions of United States and Canadian law is pointless. If the rights produce proceeds, those rights are in fact property. Since plaintiff's security interest therein was properly perfected, its interest is superior to that of the trustee. 41 We agree. The transportation operating authorities are property as between these two private parties and are therefore general intangibles subject to Freightliner's security interest. 42 The Trustee relies on Borich Transfer Co. v. Haley, 2 Or.App. 606, 469 P.2d 638 (1970), to assert that operating authorities are a privilege rather than property and, therefore, not general intangibles. In Borich, a private party sued the Public Utility Commissioner in an effort to force the Commissioner to transfer an authority without decreasing its scope. The Commissioner had earlier approved the transfer but limited the breadth of the authority. The Oregon Court of Appeals affirmed the Commissioner's decision, stating that the operating authority was a privilege and not a property right. The case is, however, distinguishable from the case at bar, which involves a dispute between private parties. 43 In Borich, the private party was attempting to assert a property right against the government. Courts finding that licenses and other governmentally granted privileges constitute property for purposes of the general intangibles provision consistently differentiate the Borich situation from that of a purely private credit transaction. These courts reason that, although a license is a privilege vis-a-vis the public authority, it has the qualities of a property right as to third parties. See, e.g., In re Sunberg, 729 F.2d 561, 563 (8th Cir.1984) ([s]uch 'anti-assignment' provisions are intended to insulate the government from conflicting claims over payments, not to preempt state commercial law as between third parties.); Gibson v. Alaska Alcoholic Beverage Control Board, 377 F.Supp. 151, 154 (D.Alaska 1974). See also In re Metric Metals Intern., Inc., 20 B.R. 633, 637 (Bkrtcy.S.D.N.Y.1981). Therefore, the operating authorities are general intangibles covered by Freightliner's security agreement. 44 Finally, under ORS 79.3020(1), a security interest in general intangibles is perfected by the filing of a financing statement. On August 6, 1982, Freightliner filed a financing statement covering, among other things, debtor's general intangibles. The Trustee contends that in order to perfect its interest in debtor's operating authorities, Freightliner was required to comply with ORS 767.186. 7 We disagree. Freightliner met the only requirement necessary for perfecting a security interest in debtor's operating authorities--it filed a financing statement covering all of debtor's general intangibles. Without deciding whether Freightliner received approval from the Public Utilities Commission under ORS 767.186, we hold that such approval was unnecessary for perfection of its security interest. 45 AFFIRMED.