In re:

KING FISCHER FISHERIES, LLC,

Debtor.

Case No. A00-00695-DMD Chapter 11

The Unsecured Creditors Committee’s (UCC) motion for reconsideration duly came before the court for a hearing on September 11, 2001. Thomas Yerbich appeared on behalf of the UCC. Spencer Sneed appeared on behalf of the Committee of Fisher Creditors. Chapter 11 trustee Larry Compton appeared on his own behalf. After hearing the arguments of counsel and reviewing the UCC’s memorandum, IT IS ORDERED:

The UCC seeks to avoid the security interests of Bristol Bay fishermen in any property of the debtor not in the Bristol Bay recording district. Their position is based on this court’s earlier decision in In re Eagle Fisheries, 1 A.B.R. 200, 205, 206 (Bankr. D. Alaska 1990) and a narrow reading of the fishermens’ lien statute.

To the extent that the debtor had any property outside of the recording district on the date of the petition, such property 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 7 ABR 169

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.

The comments were dicta. No adversary proceeding was ever filed and no final determination of the extent of liens was ever made.

I do not find a narrow view of the fishermans’ lien statute persuasive here. A.S. 34.35.391(a) gives fishermen a lien on the property of the buyer without restriction. The Legislature did not intend to limit that property by adopting the priority language of A.S. 34.35.391(c) and restricting a fisherman’s lien to property solely in the recording district. A broader interpretation is consistent with the remedial purposes of the statute. I find that valid fishermens’ liens are not avoidable on property of the debtor outside of the recording district where the fish were delivered and the liens recorded.