Perf by poss/control

Question 1

perf by possession

Answer 1

secured party may perfect a security interest in most tangible collateral by taking possession of the collateral

Question 2

can be perfected by possession

Answer 2

Goods
Instruments
Negotiable Instruments
Tangible chattel paper

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Question 3

possession is EXCLUSIVE method for:

Answer 3

money

Question 4

perfection by control

Answer 4

-a secured party may perfect a SI in specific collateral by taking control of the collateral

Question 5

Can be perfected by control

Answer 5

• deposit accounts
• investment prop
• electronic documents or electronic chattel paper
• and letter-of-credit rights

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Question 6

Control is exclusive method of possession

Answer 6

• letter-of-credit rights

- deposit accounts (IE checking account)

Question 7

gain control over deposit account

Answer 7

1) Secured party is the one maintaining the account
2) debtor, secured party, and bank have authenticated a record agreeing that the secured party has control or
3) secured party’s name is added to the debtor’s account

Question 8

automatic perfection

Answer 8

some types of perfection occur upon attachment

Question 9

automatic perfection-2 type

Answer 9

1) indefinite

2) temporary

Question 10

indefinite automatic perfection

Answer 10

• PMSI in consumer goods

- PMSI in other types of goods (inventory/equip) or in automobiles is not automatically perfected

Question 11

temporary automatic perfection

Answer 11

three ways in which this arises:

1) secured party perfects by possession and subsequently gives the collateral over to the debtor for resale
2) either the debtor or collateral moves from one state to another OR
3) when the collateral is exchanged for or gives rise to proceeds

Question 12

delivery of collateral to debtory

Answer 12

-when secured party is perfected, and makes collateral available to the debtor for the purpose of selling or exchanging the collateral, the secured interest in the collateral remains perfected for 20 days

Question 13

interstate movement of debtor

Answer 13

when a debtor moves states, a perfected Si remains perfected for 4 months after the debtor’s change in location

Question 14

interstate movement of collateral

Answer 14

when collateral is transferred to a person located in another state who becomes a debtor, a perfected security interest generally remains perfected for one year after the transfer

Question 15

effect of lapse of perfection

Answer 15

• in either of the above 2 situations, where a SI is not perfected in the second state before expiration of the applicable temporary perfection period, the SI generally ceases to be perfected prospectively
• and with respect to purchasers for value, such as subsequent secured party, such a SI is deemed never to have been perfected

Question 16

Proceeds

Answer 16

• a SI in proceeds enjoys temporary pefection and may also be entitled to indefinite automatic perfection
• temporary peft= when SI in original colat is perfected, a SI in proceeds is perfected for 20 days from the time it attaches
• indefinite automatic- SI in proceeds may continue to be automatically perfected beyond the 20 day period

Question 17

Cash proceeds

Answer 17

-where proceeds are identifiable cash proceeds and the SI in the original collateral is perfected, the perfected SI in the proceeds continues indefinitely
(perfected beyond the 20 day period in this situation)

Question 18

Same office

Answer 18

A perfected SI in proceeds may also continue indefinitely when:

1) a filed FS covers the original collateral
2) the proceeds are collateral in which a SI may be perfected by filing in the same office in which the original financing statement has been filed AND
3) the proceeds are not acquired with cash proceeds

Question 19

Notes to same office rule

Answer 19

1) if original financing statement describes the collateral broadly enough there is no need to invoke the same office rule
2) State Certificate of Title- when property is subject to a special statute in lieu of Art 9’s rules on perfection, such as the cert of title for the automobiles, the statute dictates the manner of perfection