secured transactions checklist

5/19/2018 Secured Transactions Checklist

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CrAPPS

I.

General ShitA. 1-304 General obligation of Good Faith does not create a separate duty

1. 1-103 Common law shit still applies but is intended to supplement not supplantcode but 9-201 other applicable law controls

II. Scopea) 9-109(trans. regardless of form, if there is a SI then art. 9 applies)!1-201(35) -

secures pym t or performance of an obligation.1. Personal2. Tangible 9-102(a)(44)

a) Inventory 9-102a48b)Equipment 9-102a33

c)

Consumer goods 9-102a23d)Farm products

3. Intangible 9-102(a)(42) General intangibles (point for using term)a) Software (can be int/tan depends on imbed) 9-102a75

4. Fixtures 9-102(a)(41)a) 9-109(a)1,(d)11

(1)9-334(d) PMSI(2)9-334(h)Construction mortgage trump except;

(a)9-334(e), f(i)Easy to remove shit

b)see extra code law

5.

PMSI 9-103(a)a) 9-301etc. (conflicts of law) Which Art. 9, all states and D.C. you can have ST tha

is in more than one state.II. Attachment

a) 9-203(a)when enforceable against the debtor.(1)Attachment occurs when it becomes enforceable unless SA delays

III.Enforcement-9-203(b)a) Three requirements

(1)Value given to the debtor (1-204)-def. of value is consideration)(2)Debtor must have rights in the collateral (must own)

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(3)one of conditionsb)(a)Debtor has authenticated a SA that describes collateral

(1)9-102(a)(73)creates or provides a SI(2)how to authenticate? Sign 1-201(37)(i)Implied need of a writing. (Statute of Frauds)

c) Is enforceable against the debtor and 3rdparties, see notes from day one.B. 9-204Future advances and After Acquired Property Clauses

1. Dragnet clause is not enforceable

IV.

Perfection-9-201, 9-308, etc.!9-310(conflicts law applies here too)a) 9-308amust have attachment, and the requirements in 9-310-316. (attachment

plus rule)A. 9-301Location of Debtor governs perfection

1. Location of Debtor 9-307B. Implementing Perfection

1. Three key methods:a) file, 9-310(need SA & FS)b)possess, 9-313c) control, (Defined in 8-106,Perf9-314)

Filing Possession ControlGoods Yes Yes No

Tangible Chattel Paper Yes Yes No

Negotiable Docs Yes Yes NoInstruments Yes Yes No

Investment Property Yes No YesDeposit Account No No Yes

Accounts Yes No NoFixtures Y(FF) No No

Letter-Of-Credit No No YesMoney No Yes No

General Intangible Yes No NoElectronic Chattel Paper Yes N/A Yes

Certificated Securities Yes Yes NoC. Must classify successfully different classifications of collateral require different

methods of perfection1. 9-310 general rule is that a FS must be filed to perfect2. 9-311 Must note SI on title

a) (d) Except inventory3. 9-312 exceptions to 9-310 general filing requirement

D. ProceedsPerfection Mechanics1. 20 Days Automatic Perfection (9-315(c), (d))

a)

9-102(a)64 defines Cash Proceedsb)9-203fget proceeds automatically without mention in FS (should though)

2. After 20 days perfection will continue IF one of the following tests of 9-315(d)can be met:a) filed FS covers original collateral; AND

(1)the proceeds are the type of collateral that can be perfected by filing inthe same office where the original FS was filed; AND

(2)the proceeds in question have not been acquired with cash proceeds (i.ecannot be proceeds of cash proceeds)


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FINANCING STATEMENT REQUIREMENTSI. Financing Statement (FS)

A. 9-521 Format for FSB. 9-502(a)

1. name debtor 9-503a) 9-506(b)Insufficient name is seriously misleading 9-503(must match)

(1)Alternative A most popularb)9-506(c)Search Logic

2. name SP 9-502(a)2a) incorrect SP name not seriously misleading comment 2 9-506a

3.

ID collateral (adequate description 9-108 (no super generic)& Enforceability9-203b3A)

C. Debtor must authorize the filing statement 9-504 (9-509 persons authorized)1. 9-502(d)Prefiling allowed

D. 9-506(a)(filing statement is sufficient with minor errors okay unless seriouslymisleading)

E. 9-507(!name Four Months)F. 9-510a FS Effective?

1. 9-509 Who can file/Amendments (SA=Ipso facto authority) ELSE;2. 9-625e3- $500 Damages for False filing3. 9-625b Actual damages suffered too4.

9-513c Debtor can demand termination of FSG. 9-513Termination

1. 9-509d2 Debtor can file a Termination statementH. Ky. has Alternative A in 9-518b

Was there a filing?9-5169-517(error on filing office okay)

Duration


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9-515(a,c,d): (a) FS lapses after 5 years; (c) unless a continuation statement is filed befothe lapse; (d) if FS lapses SI is no longer, and never was, perfected

b)Sec. agreement-SP gets a SI from the Dr. in collateral FS gives notice to the 3dparties. That there is a SI in the collateral.

E.II. Priority-9-201SP gets first shot

A. 9-317 SP v. Lien (9-102(a)52)

Unsecured CreditorLien

Creditor

Unperfected Secured

Creditor

UPSC wins (9-201)LC wins (9-317)

Perfected CreditorPSC wins (9-201) 1st wins (9-317)

B. 9-324PMSI Rule1. PMSI in Goods

a) No notice required

b)

Consumer goods automatic perfection (certificate of title issue)c) Must be perfected [presumably through filing. Ask how perfect a PMSI?]

2. PMSI in Proceeds of goodsa) No Notice requiredb)Must be perfected within 20 days after debtor receives possession of good

3. PMSI in Inventorya) Notice to other SC required

(1)Notice must be received by SC within 5 years before debtor receivespossession of INV

(2)Notice must state that sender expects PMSI statusb)Must be perfected prior to debtor receiving possession of inventory

4.

PMSI in identifiable cash proceeds of INV ifa) Identifiable cash proceeds are received on or before buyer takes delivery.b)All above requirements for INVc) NB: identifiable cash proceeds DO NOT EQUAL Accounts Receivable.

5.C. 9-322SP v. SPD. 9-327Deposit accounts

1. 9-322(c)SP priority still ifa) the SI is perfectedb) the proceeds are cash proceeds or the same type as the collateral; andc) for proceeds of proceeds, all intervening proceeds must be either cash

proceeds or proceeds of the same type as the collateral.E. 9-334Fixtures Pure RaceF. 9-330chattel papersG. 9-328investment propertyH. 9-327deposit accounts

9-320(a) Buyers BIOCOB takes free of security interest (K-Mart)(b)(Garage Sale)

1-201(9) BIOCOB Def1-201(29) PURCHASE AND 1-201(30) PURCHASER


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III.Default not defined by article 9

A. 9-601, etc. !9-609

a)

This is the point when most lawyers get involved. No one thinks about it until theris a form agreement and the debtor defaults.

b)9-601 rights.(1) 9-315 rights on dispositionc) 9-609right of self help repossession.(1)Breach of Peace: Stone Machine

B. 9-611(b)requires notice of disposition of collateral1. (c) Debtor and Secondary obligor entitled

a) 9-602(7) May not waive notice prior to defaultb)9-603- may define commercially reasonable by agreementc) 9-612notice must be sent In a reasonable time

(1)

non-consumer sent after default & 10days before disposition is reasonabd)9-613Notice requirements/form for notice

C. Collection Rights1. 9-601, 9-607,8

a) account debtor 9-102a(3)b)9-607 and 08collection rightc) 9-607 applies if there is an acct. dr. (the collateral is an obligation of a 3d

party.)d)SP!dr.!Acct.dr. 9-102a3person obligated on acct, chattel paper (rt. to

payment and SI), or general intangible.e) Focus on acct. and chattel paper, or instrumentf)

SP can enforce the rights of the dr. to collect from the Acct. dr. (this may onbe collection the voluntarily paid checks)

g)notice and non noticeh) notice the acct. dr. knows of the SP and may pay themi) non notice acct. dr. not know of the SP and may pay the SP too.

j) This is normal for self liquidating collaterals, (cyclic collateral)k) 9-607must be commercially reasonablel) a1may notify the acct dr. if so agreed (refers to notice)m)a2SP can take proceed to which entitled under 9-315. (proceeds from the

acct. that is the collateral).


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n) a3SP can enforce the obligations of the acct. dr. or person obligated (SPstands in the Dr. shoes for enforcement). If the dr. is an SP to the acct. dr.then SP can do all the part 6 things. (Chattel paper can be perfected bypossession.)

o) charging backcharge back can happen in recourse fin. Recourse against tdr.

p)9-608scheme for allocation of the proceeds.q)Order of payment: Expenses, sec. Obligation, junior SPs, others

r)

Not only SI in accts. and chattel paper but also sales of them. 9-109.s) What if there is an neg. instr.? SP must be a person in title (3-301) must be

holder of the instr. to enforce the rights of the instr.t) You can dispose of rather than collect on the accts.

2. Strict foreclosure9-620a) SP can take over the collateral in satisfaction of all or part of the debt. No

surplus or deficiencyb)9-620-23 is the framework.c) Used to have to possess of this but not nowd)Can be partial or full under 620ae) Notice and consent

f)

9-620e disallowed for consumer drs. Who have high equity in the collateralg)9-610 disposition becomes mandatory

D. BC 544 Trustee is Lean creditor so use priority 9-317

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