UCC–Secured Transactions–Judicial Sales–Purchaser at Judicial Sale Takes Property Subject to Unperfected Security Interest of Which He Has Knowledge
p>The first question for consideration is the applicability of the “shelter provision” of section 2-403(1) to these cases. This section may be relied upon by different parties depending upon the nature of the sale. When a bankruptcy sale is involved, the buyer may claim, as Armstrong did in Mitchell, that the section allows him to succeed to the trustee’s priority over unperfected security interests. When an ordinary judicial sale is involved, however, there is no intermediate transferee with both title to the property and a clear claim to priority, and the secured party may rely on this section to assert that the buyer takes no greater rights than his debtor had or had power to transfer and that thus the buyer takes subject to the unperfected security interest.