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IN RE WIERSMA

United States Bankruptcy Court, D. Idaho (2002) | 283 B.R. 294

4 min read

TL;DR: A bankruptcy court held that creditors' perfected security interests in "general intangibles" and "proceeds" attached to a debtor's lawsuit settlement because the claim, though involving tort allegations, was fundamentally contractual and represented compensation for damage to the original collateral.

Legal Significance: This case clarifies that under Revised UCC Article 9, a lawsuit with mixed contract and tort claims is classified as a "general intangible," not an excluded "commercial tort claim," if the contract is the gravamen of the action. It also affirms the broad definition of "proceeds."