Miscellaneous

Question 1

What are the 4 BIG parts of ST?

Answer 1

Attachment
Perfection
Priority
Enforcement

Question 2

6 step guide to ST problem

Answer 2

1. Determine if I have a ST problem
   - will contain “security” language
2. identify and classify the property at issue
   - look @ the call of the question
3. Determine which parties have/claim to have an interest in the collateral
4. For each security interest, assess “Attachment” and “Perfection”
   - Attachment: has it attached? when?
   - Perfection: has the secured party perfected? when?
5. Use attachment & perfection to identify the correct priority tule
6. apply the rule and resolve the dispute

Question 3

Whose the “secured party”?

Answer 3

the creditor that obtains a SI in the debtor’s property

Question 4

A ST must… (2)

Answer 4

be consensual
involve personal property / fixtures (NOT real estate)

Question 5

Sale of what type of collateral are treated like ST?

Answer 5

“Cruel Poodle Poking Needles At Peaceful Iguanas”

• Chattel paper
• Promissory Notes
• Accounts
• Payment intangibles

If buyer purchases any of these, treat the B as a secured party.

Question 6

What constitutes “goods”?

Answer 6

anything moveable @ the time the security interest attaches.

non-moveable that still constitutes a “good”
- fixtures
- standing timber
- unborn animals
- growing / unharvested crops
- manufactured homes

Question 7

Four sub-categories of “goods”

Answer 7

“Champion Gecko Facing Poodles;Iguanas Escaped”

• Consumer Goods (personal, fam, or household purpose)
• Farm Products (X include farm equipment)
• Inventory (X farm products that are held for sale or lease)
• Equipment (catch-all)

NOTE: Classification can change

Question 8

4 types of Right to Payment (collateral) & How to classify

Answer 8

Instrument
- promissory notes, checks

Chattel Paper
- a “record” that includes: 1) a monetary obligation; 2) ST or a lease

Accounts
- a right to payment of a monetary obligation for property that’s sold/leased/licensed

Payment Intangible
- a “catch-all” of rights to payment
- NOTE: accounts is broader!

Question 9

What is a “Right to Payment”?

Answer 9

a right to be repaid by a 3rd party, that the debtor uses as collateral for a loan

Question 10

Deposit Accounts

Answer 10

a type of collateral. Includes bank accounts, i.e. savings passbook, time, or demand account made w/ bank

Question 11

Examples of attachment by possession

Answer 11

Stuff you can hold in your hands .
(consumer goods, equipment, farm products, chattel paper, tangible docs, certificated securities, instruments, money)

Question 12

Examples of attachment by control

Answer 12

stuff you can’t hold in your hands
(electronic chattel paper, investment property, letter of credit rights, deposit accounts)

Question 13

Methods for Perfecting

Answer 13

• Filing
• Control
• Possession
• Automatic perfection

Question 14

Perfection by filing a financing statement works with any SI EXCEPT?

Answer 14

• Deposit accounts*
• Money
• Letter-of-credit rights

Question 15

what must be included in a financing statement?

Answer 15

debtor’s name
secured party’s name
description of the collateral

Question 16

Debtor’s name in the financing statement

Answer 16

Individual: DL or state issued ID
organization : articles of incorporation or last organic

Question 17

Location of filing a financing statement

Answer 17

if RP: the local office for recording mortgage
everything else:

the Secretary of State where the state in which the debtor is located

Question 18

what is the ONLY method by which deposit accounts can be perfected?

Answer 18

perfection by control

Question 19

what are the two situations that trigger automatic perfection, but temporarily?

Answer 19

delivery of collateral to the debtor
new value given

both are given 20 days

Question 20

what are the 5 temporary automatic-perfections, and how long?

Answer 20

• delivery of collateral to the debtor (20 days)
• new value given (20 days)
• debtor moves to new state (4 month)
• collateral moves to state where out-of-state debtor is (1 yr)
• proceeds (20 days)

Question 21

Difference bt “accounts” and “deposit accounts”

Answer 21

accounts are rights of payments
deposit accounts are bank accounts

Question 22

How are Consignors treated? what to do to get priority?

Answer 22

Treated as a PMSI, so if 1) perfects by filing before the consignee receives possession of the goods; and 2) properly notifies other SP –> Consignor has super priority

Question 23

To qualify as a PMSI, what type of collateral must it be?

Answer 23

Goods of software

Question 24

List of collateral that’s a “Good”

Answer 24

• Software
• Consumer Goods
• Farming Products
• Equipment
• Inventory

Question 25

What is a “consumer good”?

Answer 25

something acquired primarily for household, personal, or family use

Question 26

what constitutes a “farming good?

Answer 26

crops, livestock, supplies used for farming
Does NOT include farming equipment

Question 27

What constitutes “Inventory”

Answer 27

all goods that are not farming product, that’s being held to be sold or leased. include raw materials, works in progress, materials used or consumed in business, furnished under a service contract

Question 28

what constitutes “equipment”

Answer 28

catch-all. All goods that are not farming, consumer, or inventory.

Question 29

two most common types of intangible goods

Answer 29

accounts, deposit accounts

Question 30

when would a “lease” be treated as a SI?

Answer 30

if:
- payment must be made during the full leasing period
- not subject to termination
- lessee has an option to become the owner of the good for none/nominal consideration at the end of the lease agreement

Question 31

what type of good does NOT allow an after-acquired clause to be considered as value given?

Answer 31

consumer goods.
Unless debtor acquired goods within 10 days since SP gave value