Perfection

Question 1

How to perfect (7 ways)

Answer 1

1) Financing statement; 2) Fixture Filing; 3) Certificates of Title; 4) Possession; 5) Automatic Perfection; 6) Control; or 7) Matter of Law
Fast Food Comes Processed And Can Murder

Question 2

Financing Statement - purpose and 3 requirements

Answer 2

Simply notice to 3rd Parties filed with Sec of State - security agreement is doc that creates the rights
1) Debtor’s name; 2) Creditor’s name; 3) Description of Collateral

Question 3

Debtor’s name

Answer 3

If misspelled or tradename = seriously misleading = ineffective = unperfected. If name changes, existing collateral still secured - new collateral acquired after 4 months = NOT perfected!

Question 4

Description

Answer 4

Can be generic - remember, security agreement grants rights - so filing that is broader is void (as to the more broad aspects) UNLESS debtor signed it or other agreement

Question 5

Fixture Filing

Answer 5

Collateral related to land - same as financing statement, but also: 1) Filed w/county where land located; and 2) need - a) describe real property w/sufficient detail, b) state that it covers fixtures, c) identify owner of realty (if different)

Question 6

How long are these statements effective?

Answer 6

5 years - can renew for another 5 years, but only during the six months preceding lapse
Also, perfects any subsequent security between you and debtor

Question 7

Where to File (Financing Statement)

Answer 7

Sec of State where debtor is
Individual (and Sole Prop) - principal place of residence
Registered Org - state of registration
Non-registered Orgs - chief office

Question 8

Debtor moves to another state

Answer 8

Creditor has 4 months to discover move and refile in new state

Question 9

Certificate of Title

Answer 9

Cars, boats, trucks, etc. - Apply to DMV to have lien noted on certificate of title

Question 10

Possession

Answer 10

superior perfection to filing for instruments or chattel paper

Question 11

Automatic Perfection

Answer 11

Automatically perfects upon attachment - FOR Purchase-Money security interest in CONSUMER goods. These secure repayment of whatever portion of a loan was actually used to purchase the collateral

Question 12

Control

Answer 12

Exclusive method for commercial deposit accounts
Alternative (and superior) method for investment property
3 Ways - creditor is bank where commercial deposit account is held; Agreement where bank agrees to follow Secured Creditor’s instructions; or Creditor adds name to debtors account

Question 13

Control of Investment Property

Answer 13

Depends of form of holding:

1) Certificated (a paper certificate) - need possession and endorsement OR re-registration
2) Uncertificated - official transfer on issuer’s books into creditor’s name
3) Indirect Holdings - just like control over commercial deposit accounts - broker holding control, agreement w/broker, or listed on account

Question 14

As a Matter of Law in Proceeds

Answer 14

Automatic interest in proceeds is perfected automatically for 20-days. For this to continue either have to file financing statement or: original financing statement may have covered the proceeds; the proceeds are identifiable cash proceeds; or as a matter of law - original interest was perfected by filing, proceeds could be perfected by filing in same office, and proceeds NOT acquired with cash proceeds (NEED direct exchange of collateral)