Perfection by Filing

Question 1

attachemtn

Answer 1

• process by which SI becomes enforceable against the debtor with respect to the collarteral
• DOES NOT ALWAYS EQUAL PERFECTION

Question 2

perfection

Answer 2

generally gives the secured party superior rights in the collateral to an unperfected party and possible over other secured parties

Question 3

Perfection requires

Answer 3

1) filing a finacing statment
2) possession of the collateral
3) control over the collateral
4) automatic perfection

Question 4

FIing

Answer 4

• you file a financing statement
• filing is good for anything BUT deposit accounts, money, letter-of-credit
• puts other creditors on notice that there may be a SI

Question 5

Filing Statement MUST contain

Answer 5

1) debtor’s name
2) secure party’s name AND
3) description of collateral

Question 6

Extra info needed for real-prop related collateral

Answer 6

1) an indication that it covers the type of collateral
2) an indication that it is to be filed in the real prop records
3) description of the RP to which the collateral relates and
4) name of a record owner of the RP if the debtor does not have an interest of record in the real prop

Question 7

Debtor’s name

Answer 7

• must be its correct legal name and cannot be seriously misleading
• if not correct, could void the financing statement filing
• Safe harbor: makes a FS with an incorrect debtor’s name is valid if a search for the correct name in the filing office would uncover the misleading financing statement

Question 8

Texas Individual Debtors

Answer 8

• if have a state DL or ID card, the FS is only correct if it has the name of the person as it appears on ID (most recent card if multiple)
• no license or ID card, FS must contain the surname and first personal name of debtor

Question 9

Corp Name (debtor)

Answer 9

• if debtor is a registered org, the debtor’s name for purposes of the FS is the name shown on the public registration records (art of incorp)
• filing under trade name is insufficient

Question 10

Changed Legal name (debtor)

Answer 10

• if debtor changes his name causing FS to become seriously misleading, secured party has 4 months in which to file an amendment to the FS.
• If doesn’t do in the time frame, collateral acquird by debtor after the 4 month period is not covered by the financing statement

Question 11

Secured Party’s name

Answer 11

• error doesn’t effect the perfection of a SI on a FS, but can’t be seriously misleading
• may be subject to estoppel in favor of a holder of a conflicting claim in the collateral

Question 12

Description

Answer 12

-must sufficiently indicate the collateral
-can be satisfied by a description that meets the requirements for the SA OR
-can be super generic (all debtor’s assets)
-FS description can be much broader than the SA
-

Question 13

After acquired prop

Answer 13

• FS does not have to mention that it covers after-acquired prop, the descpiption must still be broad enough to cover such collateral
• FS need not make reference to proceeds in order for SI in proceeds to be perfected

Question 14

Authorization

Answer 14

• debtor is not required to sign the FS but they must authorize filing in the authenticated record
• authenticated SA automatically authorizes a filing with respect to the collateral covered in the SA

Question 15

Where to file

Answer 15

• SOS where the DEBTOR is located
• individuals- principal residence
• registerd org ( like corps)= state where registered
• unregistered org (partnerships)- state where maintains its place of business. More than 1, located where it has its chief executive office

Question 16

exception-where to file

Answer 16

• RP related collateral

- filed in the RP records in county where the prop is located

Question 17

Texas Assignments of Rents Act

Answer 17

-a SI in rents arising from RP is perfected when the document is creating the assignment is recorded in the county in which any part of the property is located

Question 18

Additional Info required

Answer 18

• errors wont necessarily destroy effectiveness of the FS:
• address of both the debtor and the secured party and
• identify whether the debtor is an individual or organization
• SOS still accepts without one of these even though required and is still fully effective

Question 19

effect of filing errors

Answer 19

• if FS is missing any of the required info then the filing office may reject the FS and it is treated has having not been filed
• if filing office’s rejection is unjustified the FS is treated as having been filed except with respect to a purchase of the collateral who gives value in reasonable reliance upon the absence of the record from the files
• “purchaser” covers subsequent secured parties –> broad
• filing office’s incorrect indexing of a financing statement does not effect the effectiveness of the filed FS

Question 20

duration of FS

Answer 20

• effective for 5 years from date of filing
• to continue, continuation statement must be filed within 6 months of the expiration of the FS
• debtor’s authorization not needed
• terminate: term prior to 5 year by filing a term statement