If the Loveladys were willing to litigate the question of the
enforceability of their security in this state court action against their broker and the
escrow company and escrow officer, why didn't they litigate in the bankruptcy court? Did
they have a different lawyer? In the bankruptcy court, they would have taken a position
opposite to the position they took here, i.e. they would have argued that their security
interest in the leasehold was properly perfected and thus could not be avoided by the
trustee. You will more fully understand this point after considering Commentary.Avoidance of liens in bankruptcy, Commentary.Allowed secured claims and Commentary.Consumer Chapter 7. Had they litigated in
bankruptcy court, and had the bankruptcy court reached the same conclusion that this state
court does, this state court action would have been unnecessary. Does this mean that their
bankruptcy lawyer committed malpractice or did the Loveladys simply decide to negotiate in
bankruptcy court and litigate later?