Recent Case Offers Insight Into The Protection Of Security Interests

The failure to perfect a security interest could result in losing property rights altogether despite being the unqualified owner of the property. A very recent example of this is the case of Wells Fargo Foothill Canada ULC v Big Eagle Hydro-Vac Inc., 2015 ABQB, 546 (Wells Fargo).

Wells Fargo addressed competing claims to a debtor's property in the oil and gas industry. The debtor, Big Eagle, was subject to receivership proceedings and the appointed Receiver was tasked with, among other things, selling Big Eagle's property and distributing the proceeds to creditors. Wells Fargo had taken a general security interest in all present and after acquired property of Big Eagle. Gator Frac, the competing security interest holder, had leased fracking equipment to Big Eagle. Gator Frac did not register its security interest in the Alberta Personal Property Registry, but the leases were terminated prior to the receivership. The equipment was at Big Eagle's yard waiting to be