#15 - The Typical Secured Transaction

Question 1

Problem 15.4(b) (ON EXAM!)

Answer 1

b) Will secured creditor have a security interest in debtor’s lease of the boatyard? In her bank accounts?
->The lease is not covered. Under 9-109(d)(11) real estate interests including leases don’t get included under Art 9. To collateralize the lease of real estate, you would grant a mortgage over it as a leasehold mortgage.
-> As for the bank account, 9-109(d)(13) says Art 9 doesn’t apply to assignments of deposit accounts. Really, the creditor wants the money in the account, which means it’s a proceeds issue. The “accounts” listed in the agreement probs talking about accounts receivable. The money in the bank account thus may be from the payments of accounts receivable. So the money in the bank account would be proceeds of the accounts receivable (accounts) or inventory. THIS WILL BE ON EXAM