Preview of Reclamation Issues

An Arizona bankruptcy court has a premonition of a potential issue arising from the new reclamation provisions in 11 U.S.C. 546(c). In re Tucker, 329 B.R. 291 (Bankr. D. Ariz. 2005). BAPCPA provides more favorable provisons for vendors who sell goods to a debtor shortly before bankruptcy; among other things, it increases the time for them to make a reclamation demand to 45 days after the debtor's receipt of the goods, compared to 10 days under pre-BAPCPA law.

In Tucker, the court, applying pre-BACPA law, evaluated a seller's right to reclaim a vehicle sold to the debtor under the state Uniform Commercial Code. In a footnote, the court questioned whether state law UCC analysis still applies under the amended 546(c). While 546(c) previously referred to a seller's right under "any statutory or common law" to reclaim, BAPCPA deletes the reference to statutory or common law, causing the Tucker court to query whether new 546(c) creates "an entirely new and self-contained body of reclamation law" rather than merely validating (and expanding) rights that exist under the UCC. If so, the Tucker court suggests that UCC analysis may not even apply.