                         UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


ORIX CREDIT ALLIANCE,                  
INCORPORATED,
                Plaintiff-Appellant,
                 v.
                                                No. 01-2091
YOUNG EXPRESS, INCORPORATED;
DAVID C. YOUNG; FRANK YOUNG;
WACHOVIA BANK, N.A.,
             Defendants-Appellees.
                                       
           Appeal from the United States District Court
         for the Eastern District of Virginia, at Richmond.
               Dennis W. Dohnal, Magistrate Judge.
                          (CA-00-282-3)

                        Argued: May 8, 2002

                      Decided: August 22, 2002

    Before MICHAEL, KING, and GREGORY, Circuit Judges.



Affirmed in part, reversed in part, and remanded by unpublished opin-
ion. Judge Gregory wrote the opinion, in which Judge Michael and
Judge King joined.


                            COUNSEL

ARGUED: Robert Christopher Rice, CARRELL & RICE, Rich-
mond, Virginia, for Appellant. Earle Duncan Getchell, Jr., MCGUIRE
WOODS, L.L.P., Richmond, Virginia, for Appellees Young; Robert
2              ORIX CREDIT ALLIANCE v. YOUNG EXPRESS
Dean Perrow, WILLIAMS, MULLEN, CLARK & DOBBINS, Rich-
mond, Virginia, for Appellee Wachovia. ON BRIEF: H. Slayton
Dabney, Jr., Dion W. Hayes, Amy M. Burden, MCGUIRE WOODS,
L.L.P., Richmond, Virginia, for Appellees Young; Monica McCarroll,
WILLIAMS, MULLEN, CLARK & DOBBINS, Richmond, Virginia,
for Appellee Wachovia.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                              OPINION

GREGORY, Circuit Judge:

   Orix Credit Alliance, Inc. (Orix), a lessor of computer equipment,
brought suit against Young Express, Inc., David Young, and Frank
Young alleging various claims arising from Young Express’s default
on the parties’ secured lease agreement. Orix also brought suit against
Wachovia Bank, alleging that Wachovia wrongfully retained collat-
eral in which Orix had a superior interest. Orix appeals the district
court’s dismissal of its claims pursuant to Federal Rule of Civil Pro-
cedure 12(b)(6). For the reasons stated below, we affirm in part,
reverse in part, and remand to the district court for further proceed-
ings.

                                   I.

   Because of the procedural posture of the case, we assume the
veracity of the following allegations: Orix, a New York corporation
with its principal place of business in New Jersey, is in the business
of leasing computer equipment. Until the termination of its corporate
existence on January 1, 2000, Young Express, a Virginia corporation
with its principal place of business in Virginia, was in the business of
providing trucking and transportation services. David and Frank
Young (the Young brothers) were officers and directors of Young
Express.
               ORIX CREDIT ALLIANCE v. YOUNG EXPRESS                   3
   Pursuant to a lease agreement dated December 21, 1998, Orix
leased an IBM mainframe computer and associated software to
Young Express. The term of the lease was 48 months, commencing
in June 1999. Payments were $1,835.00 per month for a total of
$88,080.00. To secure its obligations to Orix under the lease agree-
ment, Young Express granted Orix a blanket security interest in, and
lien on, all of Young Express’s then-owned or thereafter acquired
"goods, general intangibles, inventory, machinery, contract rights and
accounts, and all proceeds therefrom." In May 1999, Orix filed a
financing statement and perfected its security interest.

  Wachovia also extended credit to Young Express, and Young
Express granted Wachovia a security interest in, and lien on, all of its
personal property. Wachovia filed its financing statement in July
1999, approximately two months after Orix. Accordingly, Wachovia’s
debt was junior to Orix’s debt.

   Young Express made the first two payments due under the lease,
and then defaulted when its August 1999 payment was due. Young
Express was insolvent at the time and its only assets were its accounts
receivable. In December 1999, Young Express informed Orix that it
had ceased operations. Young Express further informed Orix that the
company owed Wachovia approximately $1.5 million and that its
receivables amounted to approximately $1.25 million. Young Express
stated that it had collected some proceeds from its accounts receivable
and made payments on Wachovia’s debt, and also stated that the com-
pany had transferred some of the (uncollected) accounts receivable
directly to Wachovia. On December 23, 1999, Orix notified
Wachovia of its perfected security interest in the accounts receivable,
and demanded that Wachovia deliver the accounts receivable and any
proceeds from collection of the accounts receivable to Orix.
Wachovia denied that any accounts receivable had been transferred
from Young Express, and refused to deliver any proceeds the bank
had obtained from Young Express. On January 1, 2000, the State Cor-
poration Commission terminated Young Express’s corporate exis-
tence for failure to pay its annual registration fee and failure to file
its annual report. Va. Code § 13.1-752. Upon such termination,
Young Express’s property and affairs passed automatically to its
directors, the Young brothers, as trustees in liquidation. Id. Litigation
ensued.
4              ORIX CREDIT ALLIANCE v. YOUNG EXPRESS
   Orix’s original complaint alleged claims of breach of contract,
breach of fiduciary duty, and conversion against the Young brothers
and Young Express. Young Express and the Young brothers moved
to dismiss, and the district court granted the motion, with leave to
amend the complaint. Orix then filed an amended and second
amended complaint, adding Wachovia as a defendant and asserting
the following claims: breach of contract against Young Express
(Count I); breach of fiduciary duty against the Young brothers (Count
II); conversion against Young Express, the Young brothers, and
Wachovia Bank (Counts III and IV); and claims for equitable relief
in the form of injunction and the appointment of a receiver (Counts
V and VI). Young Express, the Young brothers, and Wachovia filed
motions to dismiss the second amended complaint, with the exception
of Count I. The district court granted the motions, dismissed Counts
II through VI of the second amended complaint, and entered judg-
ment (by consent) against Young Express on Count I.

                                    II.

    We review a district court’s dismissal of a claim under Rule
12(b)(6) de novo. Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130,
1134 (4th Cir. 1993). A motion to dismiss for failure to state a claim
should not be granted unless it appears certain that the plaintiff can
prove no set of facts which would support its claims and would entitle
it to relief. Id. We view the complaint in the light most favorable to
the nonmoving party, and we accept as true all well pleaded allega-
tions. Id.

                                   III.

  The district court ruled that Orix could not pursue a claim for con-
version against any of the defendants, holding that Orix must first
avail itself of self-help (such as repossession) before initiating judicial
proceedings. We disagree.

   Under Virginia law, the tort of conversion encompasses "any
wrongful exercise or assumption of authority . . . over another’s
goods, depriving him of their possession; [and any] act of dominion
wrongfully exerted over property in denial of the owner’s right, or
inconsistent with it." Universal C.I.T. Credit Corp. v. Kaplan, 92
                ORIX CREDIT ALLIANCE v. YOUNG EXPRESS                    5
S.E.2d 359, 3656 (Va. 1956). Furthermore, "[a]n action for conver-
sion can be maintained only by one who has a property interest in and
is entitled to the immediate possession of the thing alleged to have
been wrongfully converted." United Leasing Corp. v. Thrift Insurance
Corp., 440 S.E.2d 902 (Va. 1994). Virginia Code § 8.9-503 (2000)1
governs the time at which the secured party’s right of possession
attaches:

      Unless otherwise agreed a secured party has on default the
      right to take possession of the collateral. In taking posses-
      sion a secured party may proceed without judicial process
      if this can be done without breach of the peace or may pro-
      ceed by action.

Orix asserts a property interest in the collateral, and Orix has made
a demand on the Young brothers, Young Express, and Wachovia to
relinquish possession of the collateral.2 No further self-help is
required, and the district court’s ruling to the contrary was in error.
Virginia’s commercial code provides that collateral remains subject to
a security interest upon sale or transfer, and further provides that the
security interest continues in any "identifiable proceeds" generated by
the disposition of the collateral. Va. Code § 8.9-306(2). Because the
complaint gives clear notice to the Young brothers and Young
Express of the basis of the claims, the motion to dismiss should have
been denied as to them.3
  1
     The parties have cited to the old version of Virginia’s commercial
code, which applies to this case; the provisions have since been amended
and recodified at § 8.9A-601 et seq. Except where noted, we cite to the
old version of the code.
   2
     Virginia Code § 8.9A-609 (2001) is the amended version of § 8.9-
503. Section 8.9A-609 provides that, after a default event, a secured
party may take possession of the collateral "pursuant to judicial pro-
cess[,] or . . . without judicial process, if it proceeds without breach of
the peace." Official Comment 5 to § 609 provides: "Normally, a junior
[secured party] who refuses to relinquish possession of collateral upon
the demand of a secured party having a superior possessory right to the
collateral would be liable in conversion."
   3
     The district court declined to rule on the Young brothers’ alternative
argument that no individual liability could attach to the Young brothers
6              ORIX CREDIT ALLIANCE v. YOUNG EXPRESS
   Wachovia argues that the judgment of the district court should be
upheld as to it because it only received proceeds from the collection
of the accounts receivable, not the accounts themselves, and those
payments were made to Wachovia "in the ordinary course" of Young
Express’s business. Wachovia relies on Comment 2(c) to Va. Code
§ 8.9-306, which provides:

     Where cash proceeds are covered into the debtor’s checking
     account and paid out in the operation of the debtor’s busi-
     ness, recipients of the funds of course take free of any claim
     which the secured party may have in them as proceeds.
     What has been said relates to payments and transfers in ordi-
     nary course [of the debtor’s business]. The law of fraudulent
     conveyances would no doubt in appropriate cases support
     recovery of proceeds by a secured party from a transferee
     out of ordinary course or otherwise in collusion with the
     debtor to defraud the secured party.

We think Wachovia’s arguments are premature. First, it is not at all
clear whether Wachovia only received proceeds from the disposition
of the collateral. Orix’s complaint alleges that some of the uncollected
accounts receivable were transferred to Wachovia. Second, even with

because there was no allegation that the collateral was converted to their
own use. We express no opinion on this issue, leaving it to the district
court to address on remand. Moreover, except insofar as the following
discussion of the Young brothers’ fiduciary duties requires, we express
no opinion on the extent to which the corporate veil shields the Young
brothers from liability, in their capacities as directors or shareholders.
  The district court also held, sua sponte, that there can be no conversion
of an undocumented intangible asset. While that is an accurate statement
of Virginia law, United Leasing v. Thrift Insurance, 440 S.E.2d 902, 906
(Va. 1994), it is inapposite to this case. Cash proceeds, in which Orix has
a continuously perfected security interest, are not intangible assets. Sim-
mons v. Miller, 544 S.E.2d 666, 679 (Va. 2000). And it is likely that the
uncollected accounts receivable are evidenced by a writing. See United
Leasing, 440 S.E.2d at 906 (recognizing claim for conversion of docu-
mented intangible property rights, "such as a valid stock certificate,
promissory note, or bond").
               ORIX CREDIT ALLIANCE v. YOUNG EXPRESS                  7
respect to proceeds that were transferred, we cannot say, at this stage
of the litigation, that Orix’s claim is meritless. Whether a payment
was made in the ordinary course of one’s business is factual inquiry.
See Orix Credit Alliance, Inc. v. Sovran Bank, N.A., 4 F.3d 1262,
1266-68 (4th Cir. 1993) (focusing on knowledge of transferee and
pre-existing procedures for payment); Orix v. Sovran Bank, 4 F.3d at
1272 n. 3 (Ervin, C.J., dissenting); Harley-Davidson Motor Co., Inc.
v. Bank of New England-Old Colony, 897 F.2d 611, 618-23 (1st Cir.
1990)(reversing summary judgment and requiring greater factual
inquiry into whether payments were made in the ordinary course of
business); J.I. Case Credit Corp. v. First Nat’l Bank, 991 F.2d 1272,
1279 (7th Cir. 1993) ("[U]nder Comment 2(c), a payment is within
the ordinary course if it was made in the operation of the debtor’s
business and if the payee did not know and was not reckless about
whether the payment violated a third party’s security interest."). It
may be that Orix’s claims have no merit; that will depend on how the
payment occurred—information Orix does not have, and is not
required to have in order to plead a valid claim. But whether or not
Orix ultimately succeeds on its claims, the complaint contains "a short
and plain statement of the claim[s] showing that the pleader is entitled
to relief," Fed. R. Civ. P. 8(a)(2), and that such statement has given
Wachovia "fair notice of what [Orix’s] claim is and the grounds upon
which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957).

                                  IV.

   Orix next argues that the district court erred in dismissing Orix’s
breach of fiduciary duty claim. According to Orix’s complaint, the
transfer of secured assets and proceeds to Wachovia Bank was
accomplished by Dave Young and Frank Young. Orix claims that by
transferring the assets and proceeds, the Young brothers breached
their duties as trustees in liquidation, and are personally liable. We
agree that Orix has stated a claim, with one important limitation.

   Under Va. Code § 13.1-752, upon termination of a corporation’s
existence, its "properties and affairs shall pass automatically to its
directors as trustees in liquidation." In Flip-Mortgage v. McElhone,
841 F.2d 531, 535 (4th Cir. 1988), we interpreted Virginia law and
stated that "[i]t is when they breach their fiduciary duties as trustees
that the directors incur personal liability to the beneficiaries of the
8              ORIX CREDIT ALLIANCE v. YOUNG EXPRESS
trust created by § [13.1-752]." See McLean Bank v. Nelson, 350
S.E.2d 651 (Va. 1986) (holding that "where a party alleges that the
business affairs of a dissolved corporation have been carried on by the
acts of certain officers, directors, or agents of the dissolved corpora-
tion, then those officers, directors, or agents can be held personally
liable for contracts entered on behalf of the dissolved corporation");
Moore v. Occupational Safety and Health Review Comm’n, 591 F.2d
991 (4th Cir. 1979) (same); Flip-Mortgage, 841 F.2d at 535 (impos-
ing personal liability on directors for breach of fiduciary duty as trust-
ees in liquidation for debts incurred before period of corporate
dissolution). Because Orix alleges that Dave and Frank Young
breached their fiduciary duties in transferring the accounts receivable
and proceeds from the collection of accounts receivable to Wachovia
Bank, a junior creditor, Orix has stated a cognizable claim.

   In ruling that Orix’s allegations were insufficient to state a claim,
the district court stated that the directors are entitled to prefer one
creditor over another, citing Bank of Commerce v. Rosemary &
Thyme, Inc., 239 S.E.2d 909 (Va. 1978). In that case, the Supreme
Court of Virginia held that a decision to prefer one creditor over
another is not enough to set aside an assignment. Bank of Commerce
is inapposite authority. Bank of Commerce did not purport to deal
with a preference for a junior creditor, but rather a preference among
unsecured creditors. To say, as the Young brothers do, that the fidu-
ciary directors have no obligation to resolve debts pursuant to the pri-
ority scheme of Virginia’s commercial code is illogical. The priority
scheme is a fundamental aspect of debt resolution—it defines the
directors’ duty.

   As mentioned above, however, there is an important limitation to
the claim Orix has stated, a limitation that appears to have eluded the
parties. Under § 13.1-752, the directors’ duties as trustees in liquida-
tion attach only upon termination of the corporate existence. See
McClean Bank, 350 S.E.2d at 656 ("In our opinion, the language of
[Code § 13.1-752] is an acknowledgment that personal liability
attaches by operation of general principles of law, to individuals who
act on behalf of a dissolved corporation."). A breach of those duties,
obviously, cannot occur save circumstances occurring after the corpo-
rate existence has been terminated. See id. Consequently, Orix’s claim
for breach of fiduciary duty is cognizable only to the extent there is
                ORIX CREDIT ALLIANCE v. YOUNG EXPRESS                     9
a valid claim that the Young brothers engaged in conduct after Janu-
ary 1, 2000—the date on which the State Corporation Commission
terminated Young Express’ corporate existence—that would consti-
tute a breach of their fiduciary duties. Any such conduct, of course,
may relate to debt incurred before January 1, 2000, see Flip-
Mortgage, 841 F.2d at 535, but the breaching conduct must have
occurred after January 1. We point this out because the complaint is
not at all clear in this regard. In fact, the fairest reading of the com-
plaint in its totality suggests no breaching conduct occurred after Jan-
uary 1, 2000. Were it not for Orix’s allegation that "[i]n violation of
their fiduciary duties to Orix, the Youngs delivered to Wachovia the
cash proceeds of the Collateral in which Orix had a perfected first pri-
ority lien[,]" Second Am. Compl. ¶ 45, and our obligation to read the
complaint in the light most favorable to the plaintiff, see Mylan Labo-
ratories, 7 F.3d at 1134, we might affirm the district court’s dis-
missal. If it becomes clear on remand that Orix asserts no breaching
conduct after January 1, 2000, the district court may consider whether
the claim should be dismissed. For now, however, we hold that Orix
has stated a claim.4

                                    V.

   For the above stated reasons, the judgment of the district court is
affirmed in part, reversed in part, and remanded to the district court
for further proceedings consistent with this opinion.

                                    AFFIRMED IN PART, REVERSED
                                        IN PART, AND REMANDED
  4
    Orix also appeals the district court’s refusal to appoint a receiver for
Young Express and to issue an injunction with respect to the transfer of
any additional collateral to Wachovia. The parties agree that a party is
entitled to equitable relief only where there is no adequate remedy at law.
Johnson v. Collins, 199 F.3d 710, 726 (4th Cir. 1999). The district court
ruled that the existence of a potential money damages remedy—the
breach of contract claim contained in Count I—was an adequate remedy
at law. We see no reason to disturb the district court’s judgment on this
matter at this time. The district court should continue to evaluate the
need for equitable relief as the litigation continues.
