2. Attachment

Question 1

What is required for attachment?

Answer 1

Establishing rights in collateral against Debtor

1) Agreement to create security interest
2) Value to Debtor
3) Debtor’s rights over collateral

Question 2

What is required for agreement to create security interest?

Answer 2

Creditor takes possession of collateral

Creditor takes control of collateral

• Must treat with reasonable care
• Must reimburse reasonable expenses
• Entitled to risk of loss
• Must give profits/accessions to Debtor

Debtor authenticates security agreement

Question 3

What is required for authenticated security agreement?

Answer 3

Specific description of collateral

Broad description of collateral

• By category/type
• Serial number
• After-acquired property clause
• NOT ‘all of Debtor’s assets’ (supergeneric)

Enough to put subsequent creditors on notice

Question 4

What is required for value to Debtor?

Answer 4

New debt

Pre-existing debt
- Security interest intended as security

Question 5

What is required for Debtor’s rights over collateral?

Answer 5

Possession (NOT title)

Title (PMSI consignments)

Question 6

Are Debtor’s rights over collateral alienable?

Answer 6

Voluntary/Involuntary alienability

Regardless of agreement prohibition

Governed by other law (NOT UCC)

Question 7

What is required for attachment over non-consumer deposit accounts?

Answer 7

Bank (secured party)
- Automatic control

Bank (not secured party)

1) Holds in secured party’s name
2) Authenticated agreement (Bank + Secured Party + Debtor)
- Bank to comply with Secured Party’s orders without Debtor’s consent

Question 8

What is required for attachment over after-acquired property?

Answer 8

Non-consumer goods
- Debtor must acquire collateral => Attachment

Consumer goods
- Debtor must acquire rights within 10 days after receiving value => Attachment