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1. Read and understand the case.

Show your Analysis and Reasoning and


make it clear you understand the material. Be sure to use the concepts of the course to show your reasoning. Summarize the situation. Dedicate at least one heading to each following outline topic: Parties

This case arises from a Chapter 11 bankruptcy proceeding initiated by

Keystone Consolidated Industries, Inc. and one of its creditors PSC Metals, Inc. Keystone is one of the largest wire producers in the world with over 2,000,000 square feet of manufacturing space on over 1000 acres. With over 900 employees Keystone produces over 650,000 tons of steel (http://www.keystonesteel.com). PSC Metals, on the other hand, is one of the world largest scrap metal processors with over 47 locations worldwide and state of the art processing equipment (http://www.pscmetals.com). Keystone and five of its subsidiaries filed for voluntary protection and reorganization under Chapter 11 of the Bankruptcy code on February 26, 2004. During this time, the company managed its affairs as a debtor-in-possession prompted by weaknesses in Keystone selling prices, increases in scrap costs and raw materials as well as significant liquidity costs linked to employee costs and benefits. Keystone secured approval of its reorganization plan and bankruptcy protection lifted on August 31, 2005. (http://biz.yahoo.com/e/051130/kycn.ob10-k.html)
PSC held a security interest in some of Keystones assets and filed a financing statement against Keystone Steel & Wire Co, a trade name used by the Debtor ((310 BR 392). PSC and Keystone dispute the validity of using a trade name as sufficiently giving notice to individuals searching obligations owed by the debtor. PSC argues that use of a reasonably close trade name is not seriously misleading, and thus an imperfect security interest. As referenced above, the central issue in this case whether a financing statement under a corporations trade name as opposed to its legal name is seriously misleading and therefore defective. The consequence of such a finding would render PSCs secured interest an unsecured interest, and potentially worthless under the bankruptcy reorganization plan. PSC relies on the holding in In re Paramount Intl, Inc. 154 B.R. 712 (Bankr.N.D.Ill. 1993) to support the holding that use of a regularly used trade name that is similar to the legal name is not seriously misleading. In Paramount, at the time of the original loan, the debtors name was Paramount Attractions, Inc. But two months after the loan was made, the company changed its name to Paramount International Inc. After the name change, the financing statement was never changed to reflect the corporations new name. Ultimately, in this case, the court ruled in favor of the creditor and denied Paramounts request for the court to use its avoidance powers. The Keystone court differentiates Paramount on several grounds. The court relies on

the idea that in Keystone, there is positive evidence that a search of the corporations legal name Keystone Consolidated Industries Inc. did not reveal the financing statement filed under their trade name. Second, the name change in Paramount involved a private company whereas Keystone was a publicly traded company. Whereas Paramount changed its legal name after the fact, Keystone has been doing business under the same legal name in the public market place since 1968. PSC was always aware of Keystones legal name. Finally, the court noted the changing legal landscape of UCC Article 9 interpretation. Essentially, just weeks before the Keystone financing statement was filed, UCC formally codified the legal name requirement under UCC section 9-503(a). Essentially, the court in Keystone upheld the current UCC section 9 interpretation holding that a financing statement is seriously misleading If a search of the records of the filing office under the debtors correct name, using the filing offices standard search logic, if any, would disclose a financing statement fails sufficieintly to provide the name of the debtor in accordance with Section 9-503(a)[810 ILCS 5/9-503], the name provided does not make the financing statement seriously misleading. UCC section 9-506(c) Based on this rule, the bankruptcy appeals court overruled the lower courts ruling and sided with Keystone. The ruling had the effect of stripping the security interest PSC held thereby rendering their interest unsecured. Ultimately the court found that

Facts [Summarize those facts critical to the outcome of the case.] Procedure [Who brought the appeal? What was the outcome in the lower court(s)?] d. Issue The sole issue in this case was whether, under UCC section 9, the use of a trade name instead of a the legal is sufficient to sustain a security interest in a financing statement. e. Holding [How did the court resolve the issue(s)? Who won?] f. Reasoning [Explain the logic that supported the court's decision.] g. Case Questions [Be sure to address and thoroughly answer each and every case question and each part of each question.] h. Conclusion [This should summarize the key aspects of the decision and also your recommendations on the court's ruling.] i. Include citations on the slides and a reference page with your sources. Use APA style citations and references. 2. Do significant research outside of the book and demonstrate that you have in a very obvious way. This refers to research beyond the legal research. This involves something about the parties or other interesting related area. Show something you have discovered about the case, parties, or other important element from your own research. Be sure this is obvious and adds value beyond the legal
b. c.

reasoning of the case.

3. Pay strict attention to quality in terms of substance, form, grammar, and