Texas Adopts the “Subordination” Rule to Solve Circular Priority Disputes Involving Personal Property: ITT Diversified Credit Corp. v. First City Capital Corp., 737 S.W.2d 803 (Tex. 1987)
Rasmussen, Blake Elliot
MetadataShow full item record
Examines the predicate for and implications of the recent Texas Supreme Court decision in ITT Diversified Credit Corp. v. First City Capital Corp., in which the Court established the subordination rule as its method for solving circular priority disputes involving personal property. The author gives a detailed explanation of circular priority systems, describes the various contexts in which circular priority problems may arise, and details several approaches courts have taken to deal with disputes arising under circular priority. The article closes with a brief history of the ways in which Texas courts have historically dealt with these problems and the consequences of the Court’s holding in ITT Diversified.