Preservation of Lien for Benefit of the Estate

The transfer of an “avoided” lien to the estate so that the estate and its general creditors benefit from the value of the lien. This prevents a junior secured creditor from ascending to a more senior position and obtaining an undeserved windfall in the form of the value generated by the lien avoidance.

Bankruptcy Code § 551. See also Avoidance Actions, Strong Arm Powers.

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