Which of the Following Was the Result in Re Tower

question 11

Multiple Choice

Which of the following was the result In Re Tower Air Inc.,the case in the text in which a debtor made repairs to an aircraft used as collateral without claiming available insurance proceeds,later filed bankruptcy,and the bankruptcy trustee and the creditor each claimed entitlement to the insurance proceeds?

• A) The court ruled in favor of the bankruptcy trustee on the basis that regardless of whether or not repairs were made, the right to claim the proceeds belonged to the debtor; and the trustee succeeded to the rights of the debtor.
• B) The court ruled in favor of the bankruptcy trustee on the basis that because the debtor had already repaired the collateral, the trustee was entitled to the proceeds of the insurance policy.
• C) The court ruled in favor of the bankruptcy trustee on the basis that the trustee made first claim to the insurance proceeds and already had the proceeds in possession when the creditor first claimed entitlement to them.
• D) The court ruled that the creditor was entitled to the full insurance proceeds, without consideration of the amount of the debt, on the basis that it had a secured interest.
• E) The court ruled that the creditor was entitled to the proceeds of the insurance policy up to the amount of the debt on the basis that it had a secured interest.