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MEE Review > MEE_Secured Trans > Flashcards

MEE_Secured Trans Flashcards

1
Q

Attachment

A

1) Debtor authenticates sec agmt or creditor takes poss’n or ctrl of collateral
2) Creditor gives value
3) Debtor has rights in collateral

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2
Q

How are sec interest in goods Perfected?

A

perfected by Possession or Filing Financing Stmt

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3
Q

PMSI

A

creditor advances credit/provides funds needed for purchase &
takes sec int in goods purchased

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4
Q

PMSI in Consumer Goods

A

Automatically Perfected on Attachment

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5
Q

Consumer goods =

A

used/bought primarily for personal, family, household purposes

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6
Q

Equipment =

A

goods that aren’t consumer goods, inventory or farm products

catch all for goods

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7
Q

Priority btw two perfected sec int

A

First to file/perfect has priority

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8
Q

To attach a security interest:

A

1) either Debtor must authenticate a Security Agmt granting Creditor sec int in collateral that describes the collateral
OR
Creditor must take Possession or Control of the collateral
(2) Creditor must give value and
(3) Debtor must have rights in collateral

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9
Q

Priority - Perfected v Unperfected

A

Perfected prevails over Unperfected in same collateral

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10
Q

Accessions =

A

goods physically united w/ other goods such that identity is not lost

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11
Q

Priority - cert of title v accession

A

Sec Int. in whole perfected under cert of title prevails over sec int in accession

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12
Q

after-acquired property clause =

A

sec int attaches when Debtor obtains interest in collateral

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13
Q

Superpriority Rule

A

Equipment PMSI has superpriority if PMSI is perfected when debtor gets possession

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14
Q

Perfection by Filing

A

Sec int in all collateral except deposit accounts and money can be perfected by filing financing stmt, generally w/ sec of state

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15
Q

Financing Stmt - requirements

A

Financing stmt must contain Debtor’s name & address, Secured party’s name & address, and indication of collateral

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16
Q

Automatic Perfection

A

may occur w/o filing sec int in small-scale assignment of an Account or Paymt Intangible that does not alone transfer a significant part of the assignor’s outstanding accounts or payment intangibles to creditor

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17
Q

Attachment (checking acct)

A

parties agree to create sec agmt
creditor gives value
debtor has rights in collateral

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18
Q

Financing Stmt - Name not seriously misleading

A

if financing stmt still would be discovered in search of debtor’s correct name using filing office std search logic

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19
Q

Waiver of redemption

A

Debtor can redeem collateral after default -

right to redeem can be waived only after default

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20
Q

Lease intended as sec governed by art 9 as sec int

A

Intent measured by economic realities of transaction

P paid more than cost of over lease term
P could no end lease at any time
L could recoer if P didn’t pay
P had option to buy a end of lease

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21
Q

Proceeds of Sale - order of priority

A

Proceeds of sale go to expenses - then to debt foreclosed - then to junior interests

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22
Q

sec int after default

A

all subordinate sec int discharged if sec party sells collateral after default, unless bad-faith purchaser

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23
Q

Inventory

A

goods including supplies used in manufacturing, raw materials (typically items used quickly in a business) (goods held for sale/lease)

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24
Q

BIOC =

A

buyer in ordinary course of business takes free of nonpossessory sec int created by seller unless he knows sale violates sec agmt

25
Q

Inventory

A

held by person who holds them for sale or lease or to be furnished under service contracts, materials used or consumed in a business in a short period of time

26
Q

Farm products

A

crops or livestock or supplies used or produced in farming ops or products of crops or livestock in their unmanufactured states

(ginned cotton, wool-clip, maple syrup, milk and eggs)

27
Q

Instruments

A

pieces of paper representing the right to be paid

promissory notes, drafts, checks, cds

28
Q

Documents

A

represent the right to receive goods (bill of lading, warehouse receipt)

29
Q

Accounts

A

includes a right to payment for property sold or services rendered (not evidenced by an instrument or chattel paper)

30
Q

General Intangibles

A

an personal property not coming /in scope of other definitions

(software, patent, trademark, copyrights, goodwill)

31
Q

Classification of a computer program

A

if sold separately, general intangible

when embedded in computer, if in business is equipment or if at home, consumer good

32
Q

To distinguish the “true lease” from the “disguised sale”:

A

Ask: At the time parties entered into transaction, was it reasonably likely Lessor would get item back when it still had meaningful economic value?

Lease disguised as secured sale -
(1) at end of lease period, lessee becomes owner of x for little or no consideration,
OR
(2) lessee bound to purchase goods at end of lease or renew lease for remaining economic life of goods
OR
(3) lease for entire economic life of leased goods, w/ or w/o renewal

33
Q

Ways a security interest Attaches:

A

1) Security Agreement
2) Possession
3) Control

34
Q

Possession =

A

collateral in possession of secured party pursuant to oral sec. agmt = pledge

(i’ll loan you $50, keep your watch until repayment)

35
Q

Control =

A

if collateral is non-consumer deposit acct, electronic chattel paper, or investment property

36
Q

Security Agreement description must

A

reasonably identify collateral

supergeneric description not sufficient

37
Q

Rule for Proceeds

A

Sec int automatically gives sec. p arty right to “Identifiable proceeds”

Identifiable = traced back to creditor’s original collateral

38
Q

Methods of Perfection

A

1) Automatic Perfection
2) Possession of collateral by secured party
3) Control - non-consumer deposit accounts, electronic chatel paper, invest. property

39
Q

What is the Only way to perfect a Security interest covered by a Certificate of Title Statute?

A

Secured Party gets relevant gov’t authority to note sec. party’s lien on Cert of Title

Exception: debtor holding car as inventory, must perfect by filing Financing Statement

40
Q

Contents of a Filing Statement

A

Debtor’s name

Description of collateral - “reasonably identify” - supergeneric description valid

Secured Party’s name

Authorized Filing by debtor (automatically authorizes fin. stmt if sec agmt covers same collateral) - signature not required

41
Q

Perfection as to Proceeds:

A

if perfected security interest in collateral, automatic perfected sec. int. in proceeds in exchange for that collateral for 20 days, when cash proceeds are used to acquire different, non-cash proceeds.

(does not apply to Cash Proceeds)

42
Q

Same Office Rule - Perfection of Proceeds

A

a security interest in proceeds need not be re-perfected if the filing would be in the same office as the original financing statement already filed.[27]

43
Q

Priority - Secured Party v Secured Party

A

1st to file or perfect, whichever occurs first, has priority

44
Q

PMSI in Consumer Goods

A

Automatically perfected upon attachment

45
Q

Priority - between two Unperfected secured creditors

A

First to attach has priority

46
Q

Priority - Perfected v Unperfected

A

Perfected secured creditor has priority

47
Q

Special Priority - PMSI in goods other than Inventory or Livestock

A

has priority over conflicting security interest in same goods or its identifiable proceeds if PMSI is perfected at time debtor received Possession of collateral OR W/in 20 days thereafter

48
Q

PMSI =

A

Sale on Credit + Security Interest

49
Q

Special Priority - PMSI in Inventory or Livestock

A

has priority over a conflicting security interest in same collateral (as well as proceeds) if, before debtor receives possession of inventory or livestock , secured party (1) Perfects and (2) sends authenticated notification to holders of previously filed conflicting security interests in collateral (w/in 5 years)

Prior to debtor Possession, Secured party (1) Perfects and (2) Notice

50
Q

Conflicting PMSI

A

Seller-Financed PMSI has priority over Financer-Financed PMSI

51
Q

Special Priority - Investment Property & Deposit Accounts

A

Sec Int. perfected by CONTROL trumps sec int perfected by Filing or Automatic

if both by control, rank according to Time of obtaining control

52
Q

secured party v buyer of collateral - BIOC general rule

A

BIOC “takes free of security interest created by his seller even though sec int perfected and even though buyer knows of existence

53
Q

secured party v buyer of collateral - BIOC (not) general rule

A

Buyer not in ordinary course of business takes “subject to” perfected security interests;
Also takes “free from” Unperfected security interests, unless they “know” of sec int.

54
Q

Special priority - Consumer to Consumer Sales

A

if consumer goods, buyer takes “free of” sec int. even if perfected if buys w/o knowledge of sec int, for value, and for own personal, family or household, unless prior to purchase, sec party filed financing stmt covering such goods

(garage sales)

55
Q

Special Priority - Secured Party v Judgment Lien Holders

A

Lien creditor wins over unperfected security interest

Perfected security interest wins over Lien Creditor

56
Q

Special Priority - PMSI v Lien Creditor

A

If secured party files on PMSI w/in 20 days after debtor received possession of collateral trumps lien creditor which arises btw attachment & filing (perfection)

57
Q

Buyers generally take goods ____ ______ any perfected security interests / OR a perfected security interest generally follows the ________

A

takes subject to, collateral

58
Q

BIOC takes ____ ____ nonpossessory security interest created by ____, unless he knows the sale violates a ______ ______

A

free of, seller, security agreement

59
Q

Consumer - Consumer

A

consumer who buys goods from another consumer, before a financing statement has been filed and w/o knowledge of the interest, takes goods free of security interests / OR a consumer who buys goods subject to an automatically perfected PMSI takes goods free of security interest

MEE Review (5 decks)

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