Statutory Tax Lien Can Be Set Aside as Against a Bona Fide Purchaser

In In re Mainline Equipment, Inc., Case No. 15-60069, the Ninth Circuit Court of Appeals held that the County of Los Angeles ("County") could not enforce its tax liens on personal property against a bona fide purchaser when the County had failed to perfect its liens. The Chapter 11 debtor could set aside the County's liens under Bankruptcy Code Section 545 because the liens were only statutory and were unenforceable against a bona fide purchaser based on the enforceability of the liens pursuant to Cal. Rev. and Tax Code section 2191.4. Specifically, the County had recorded tax delinquency certificates with the County Recorder but failed to file its liens with the Secretary of State of California. While this granted the County a lien upon all of the debtor's real and personal property in the county in which it was recorded, such liens were not enforceable against a bona fide purchaser of personal property and thus, could be avoided by the debtor. The result would likely be different if real property were concerned because judgment liens recorded with the County Recorder are perfected as to real property.

For the full opinion, please Read More here. Should you have any questions, please contact Melissa Davis Lowe or any of the attorneys at Shulman Bastian Friedman & Bui LLP at 949-340-3400.

No Comments

Leave a comment
Comment Information
  • NBLSC Board Certified Lawyer Rated By Super Lawyers | Ryan P. Durham Rated By Super Lawyers | Ben Boston
  • Tennessee Association For Justice | Member 2015-2016 American Association For Premier DUI Attorneys The National Trial Lawyers | Top 100 Trial Lawyers
  • American Institute of Family Law Attorneys | 10 best 2015 American Institute of Personal Injury attorneys | 10 best 2016

Schedule a Consultation Today

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Shulman Bastian LLP | Full Service. Business. Lawyers.

100 Spectrum Center Drive
Suite 600
Irvine, CA 92618

Map & Directions

3550 Vine Street
Suite 210
Riverside, CA 92507

Map & Directions