In Re Lester D. Lane and Bonnie F. Lane, Debtors. Hurst Concrete Products, Inc. v. Lester D. Lane Bonnie F. Lane

Hurst Concrete Co. (“Hurst”) appeals a Bankruptcy Appellate Panel (“BAP”) decision denying the secured status of Hurst’s claim to the real property of Lester and Bonnie Lane (“Lanes”).

The threshold question is whether the Superior Court’s judgment in the underlying case affected the title or right of possession of real property within the meaning of the California lis pendens statute. Cal. Civ.Pro.Code § 409(a). We disagree with the BAP’s finding that the Superior Court’s judgment did not affect the title or right of possession of the Lanes’ real property.

The determinative question then is whether the recording of the lis pendens, which occurred prior to the preference period, constituted a transfer under the Bankruptcy Code. 11 U.S.C. § 547 (e)(1)(A). We hold that, under California law, the record ing of a lis pendens constitutes a transfer within the meaning of section 547(e)(1)(A), and, consequently, appellant’s interest in the Lanes’ property is not avoidable as a preferential transfer. We reverse.

BACKGROUND

Appellant-creditor Hurst is a California corporation. Appellee-debtor Lester Lane was, until December 1983, the vice-president and general manager of Hurst.…