I.   Introduction.

        The debtor in this case previously stipulated with certain fishing boat creditors (hereafter boat creditors) that cash proceeds from the post-petition sale of fish to Clouston Foods and other entities would be temporarily held by the debtor, pending further order of this court. The debtor has since moved for an order approving use of the proceeds from the Clouston sale as cash collateral or, in the alternative, an order stating that the boat creditors do not have a security interest in proceeds from Clouston sales. Pursuant to the stipulation of the parties, the court is to first look to the security interest issue.

        Eagle Fisheries is a fish processor. Boat creditors delivered fish to Eagle Fisheries in April and May of 1990. The fish were valued at over $200,000.00. Eagle Fisheries shipped most of the fish to Clouston in April and May. The fish were sent to Boston and Seattle. Boat creditor, the F/V Mar Pacifico recorded a fisherman's lien on May 31, 1990 in the Kodiak recording         1 ABR 201  district. The debtor filed Chapter 11 on June 4, 1990. It shipped one van of fish to Clouston Foods postpetition. The four remaining boat creditors recorded fisherman's liens in June and July. All liens were recorded in the Kodiak recording district within the required ninety day statutory period.

II.    Fisherman's Liens.

        The fisherman's lien statute, A.S. 34.35.391 states:

       (a)    A person who sells fish to a fish processor as defined in A.S. 16.10.296, or to a primary fish buyer as defined in A.S. 16.10.296, or to a cooperative corporation organized under A.S. 10.15, and receives a fish ticket or a record of purchase as described in A.S. 16.05.690 has a lien upon the property of the fish processor, primary fish buyer, or cooperative corporation for the value of the fish.

        (b)   A person who claims the benefit of this section shall, within 90 days of the date the fish are sold, record a claim of lien in the recorder's office of the recording district where the fish were sold.

        (c)    The lien provided in this section is preferred, prior, and superior to a mortgage, attachment, claim, or demand made or recorded in the recording district in which the property is located after the date on which the fish are delivered to the buyer of the fish.

        The purpose of the lien statute was noted in the Senate Resource Committee hearings held on April 30, 1982. The lien statute was part of an amendment to a bill regulating the sale of fish without limited entry permits. Excerpts from the hearing minutes state:

Tom Sofo, Legal Counsel. Legal Services Division, discussed a proposed amendment that would establish a statutory lien under state law to protect the fisherman if the fish purchaser goes bankrupt. This lien would be given priority right behind judicial liens.

Rodcier Painter, Executive Director. United Fishermen of Alaska, supports the concept of the amendment, as fishermen are currently unsecured creditors and at the end of the line to get assets in the event of purchaser bankruptcy, but feels there are some questions that need to be answered. . . .

Rick Lauber, Pacific Seafood Processors Association, . . . Lauber also expressed concern over the proposed amendment, stating that the mere holding of the fish ticket is a lien. . .

III.    § 545(2).

        The debtor argues that the fisherman's liens are invalid pursuant to provisions of 11 U.S.C. § 545(2). It provides:
        1 ABR 203 

     The trustee may avoid the fixing of a statutory lien on property of the debtor to the extent that such lien--.

       (2)    is not perfected or enforceable at the time of the commencement of the case against a bona fide purchaser that purchases such property at the time of the commencement of the case, whether or not such a purchaser exists; . . .

        The rights and powers of a trustee under sections 544, 545 and 549 of this title are subject to any generally applicable law that permits perfection of an interest in property to be effective against an entity that acquires rights in such property before the date of such perfection. . . .

        Neither party has supplied, nor can the court find any Alaskan cases that deal directly with the issue of how Alaska treats a bona tide purchaser of property subject to a statutory lien. The statute creating the lien, however, provides an answer. It states that the lien is superior to any "mortgage, attachment, claim or demand . . ." made in the recording district after delivery of the fish. A.S. 34.35.391. I find, therefore, that the statutory lien of F/V Mar Pacifico could not be defeated by a bona         1 ABR 204  fide purchaser in the Kodiak recording district. The other boat creditors stand in the same shoes as the F/V Mar Pacifico as Alaskan law permits perfection to be effective against an intervening bona fide purchaser prior to perfection. Thus under 11 U.S.C. § 546(b) the remaining boat creditors are also perfected. Therefore, on June 4, 1990 the fisherman's liens applied as to all property located in the Kodiak recording district and were not subject to invalidation.

        One van load of fish was shipped post-petition to Seattle. The fish did not lose its encumbrance when it journeyed outside of the Kodiak recording district.

        Alaska law applies to determine the validity of the lien for purposes of fish delivered out of state. This court adopts the rationale of the Restatement of Laws approved in In re Holiday Airlines Corp., 620 F.2d 731 (9th Cir. 1980). Section 251 of the Restatement (Second) of Conflicts (1971) states:

       (1)     The validity and effect of a security interest in a chattel as between the immediate parties are determined by the local law of the state which, with respect to the particular issue, has the most significant relationship to the parties, the chattel and the security interest under the principles stated in § 6.

       (2)    In the absence of an effective choice of law by the parties, greater weight will usually be given to the location of the chattel at the time that the security interest attached than to any other contact in determining the state of the applicable law.

        1 ABR 205          The state with the most "significant relationship to the parties, the chattel and the security interest" is Alaska. The fish were caught off the coast of Alaska. The fish were delivered and processed at the debtor's plant in Kodiak, Alaska. The fish were shipped from Alaska to Seattle. The location of the fish at the time the security interest attached was Alaska. Alaska law, not the law of Washington applies. Matter of Cuff, 54 B.R. 424 (Bankr. Wis. 1985), See also Underwood v. Phillips Petr. Co., 155 F.2d 372, 374 (10th Cir. 1946); Four Star Aviation. Inc. v. United States, 409 F.2d 292, 293, n. 6 (5th Cir. 1969); Figuero v. Figuero, 303 So.2d 801, 803 (La.App. 1974).

        Pursuant to Alaskan law, the fishermen have valid liens. The claims or demands of a bona fide purchaser are subservient to those liens in the Kodiak recording district. The liens are not subject to invalidation under 11 U.S.C. § 545(2) as to the post- petition fish sale.

IV.    Scope of Lien.

        Having determined that the liens on the post-petition fish sale are not subject to invalidation under 11 U.S.C. § 545(2), the lien statute must be examined to determine the effect of such fisherman's liens upon pre-petition fish sales.

        To the extent that the debtor had any property outside of the recording district on the date of the petition, such property         1 ABR 206  appears subject to statutory lien invalidation under 11 U.S.C. § 545(2). A.S. 34.35.930(c) only prefers the liens of fishermen in the recording district. If the debtor desires to invalidate any such statutory lien, however, it must do so through an appropriate action under Bankruptcy Rule 7001. It is beyond the scope of this proceeding for the court to so order. Any cash collateral order will have to encompass the fishermans' lien interests until such interests are properly invalidated.

V.    Conclusion.

        The debtor's motion for an order that boat creditors do not have a security interest in proceeds from the post-petition Clouston sale is denied. The fishermen have an interest in the cash collateral.

        The debtor has also filed an alternative motion for use of cash collateral on the basis of providing adequate protection. That motion will be heard Thursday, October 11, 1990 at the hour of 9:00 a.m. in Courtroom 2 - Room 126, 605 W. 4th Avenue, Anchorage, Alaska.

       DATED:    October 2, 1990.

DONALD MacDONALD IV
United States Bankruptcy Judge