Mealey's ( March 24, 2020, 4:43 PM EDT) -- In general. The proper characterization of the transaction is crucial for at least two purposes: If a true lease is involved, (1) the lessor need not file a UCC financing statement and (2) if the debtor files bankruptcy, the trustee must assume or reject the lease, without imposing cramdown on the lessor. In recent years, most of the litigation has occurred in the bankruptcy courts, with a focus on the right of the purported lessor to recover the equipment unless the trustee assumes the lease obligations in full under the Bankruptcy Code, 11 USC 365. In a significant decision, an Alabama bankruptcy court was unwilling to recharacterize a TRAC (“terminal rental adjustment clause”) equipment lease as a disguised secured transaction for purposes of 11 USC 365....