PERFECTION

Question 1

Perfection Generally

Answer 1

Perfection protects the secured party against third party claims

Question 2

4 Ways of Perfection

Answer 2

1. Filing
2. Possession
3. Control
4. Automatically

Question 3

Filing

Answer 3

Filing financing statement w/ secretary of state where debtor/real property located perfects security interest

Question 4

Filing Requirements

Answer 4

1. Debtor’s Name (as appears on driver’s license);
2. Secured Party’s Name (or rep’s); AND
3. Type of Collateral (same description from SA works)

Question 5

Filing Mistakes

Answer 5

Mistake in D’s name that’s SERIOUSLY MISLEADING makes perfection ineffective unless title search would still pull the name up

Question 6

Name Change (Filing)

Answer 6

SP must file amendment w/I 4 months after name change by D otherwise future collateral not covered

Question 7

Location Change (Filing)

Answer 7

If D moves to new state, SP must file in new state w/I 4 months or interest becomes unperfected

Question 8

Filing Expiration

Answer 8

Expires after 5 years unless extended by continuation statement filed w/I 6 months prior to expiration

Expiration makes SI unperfected

Question 9

Filing Items w/ Certificates of Title

Answer 9

Ex: Car
Filing doesn’t work, lien must be noted on certificate of title

Question 10

Possession

Answer 10

Can work as BOTH ATTACHMENT + PERFECTION

Works for good, negotiable document, instrument, money, tangible chattel paper

DOES NOT WORK FOR ACCOUNT, DEPOSIT ACCOUNT, GENERAL INTANGIBLE, TORT CLAIM (ADGT)

Question 11

Control

Answer 11

Allowed for deposit account or letter of credit rights

If SP holding account is bank: control automatic

Control can’t require D’s cooperation for access

Question 12

Purchase Money Security Interest

Answer 12

Goods for which the loan is extended to the debtor is the collateral for the security interest

Question 13

2 Ways PMSIs Arise

Answer 13

1. Creditor sells goods to debtor on credit & reserves SI
2. Advances funds used to purchase goods & reserves SI

Question 14

PMSI Perfection

Answer 14

AUTOMATIC IN CONSUMER GOODS
In anything else must be filed

Question 15

Proceeds Perfection

Answer 15

If SI in OG collateral perfected –> SI in proceeds continues for 20 days

Question 16

Extend Proceeds Perfection > 20 Days

Answer 16

1. Pursuant to Financing Statement (OG FS broad enough to encompass proceeds/SP amends FS to cover proceeds)
2. Identifiable cash proceeds
3. Same Office Rule (would be filed in same place as OG collateral)