Perfecton Flashcards
A Security interest is perfected when
it has attached and all requirements for perfection are met
if requirements are met before attachment, security interest is perfected on attachment
perfection
the process where secured party gives notice to the world of its security interest
Methods of perfection - list
filing or taking possession of collateral
Filing
filing of a financing statement in a public office
most common method
Where can one file a financing statement
secretary of state
office of county clerk (limited circumstances - interest in fixtures, interest in co-op)
Multistate transaction - where file?
file where debtor is located
Where is a registered organization located
in the state of organization
Where is a non-registered organization located?
debtors place of business or
chief executive office if more than one place of business.
Where is an individual debtor located?
at their principal residence
Perfection by Possession
only applies to tangible collateral
Collateral in Possession of 3rd party
must authenticate a writing acknowledging in possession for another parties benefit
Security interest in Cash Money
only way to perfect interest in cash is possession
Duty of Care
secured party in possession must use reasonable care in custody of property
Perfection by Control applies to what kind of collateral
investment securities
bank deposit accounts
letter of credit rights
Control of Investment Securities in Bearer Form
must have possession of the security
Control of Investment Securities in Registered Form
must have possession or endorsed over to secured party
Control of uncertificated security
issuer agrees to comply with secured parties instructions
Security interest in a deposit account - how to get control
- secured party is the bank where account is
- debtor, secured party, and bank agree in writing that bank will follow secured parties instructions
- secured party becomes banks customer with respect to the deposit account
Automatic Perfection
limited instances where perfection is automatic.
Most Common: Purchase Money Security Interest in consumer goods
Security interest perfected by one method, and later perfected by another with no intermediate period of being unperfected
they are continuously perfected and perfection has not lapsed
Certificated Securities
Negotiable Documents or instruments
automatic but temporary 20 day perfection
need to get control or file
Secured party consents to disposition of collateral
security interest continues after disposition absent consent and will attach to proceeds
