Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

100 > SEC FINAL DECK > Flashcards

SEC FINAL DECK Flashcards

1
Q

ANALYSIS OF SECURED PARTY STATUS

A

1) CLASSIFY THE COLLATERAL

2) ATTACHMENT: DOES THE SP HAVE AN ENFORECEABLE SI?

3)PERFECTION: HAS THE SP TAKEN STEPS TO MAKE ITS INTEREST PUBLIC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

CLASSIFY

A

1) GOODS (CG, EQUIP, FP, INVENTORY)

2) ACCOUNTS

3) INSTRUMENTS

4) CHATTEL PAPER

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

ATTACHMENT: DOES THE SP HAVE AN ENFORCEABLE SI

A

1) VALUE GIVEN

2) D HAS RIGHTS IN THE COLLATERAL

3) SECURITY AGREEMENT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

PERFECTION: HAS THE SP TAKEN STEPS TO MAKE INT PUBLIC

A

1) FILING A FS

2) SP TAKING POSSESSION

3) AUTOMATIC PERF (PMSI IN CONSUMER GOODS)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

ATTACHMENT OCCURS WHEN

A

1) VALUE HAS BEEN GIVEN

2) D HAS RIGHTS IN COLLATERAL

3) D HAS AUTHENTICATED A SA CONTAINING A DESCRIPTION OF THE COLLATERAL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

(PERFECTION) FOR A FILING STATEMENT TO BE EFFECTIVE

MUST CONTAIN

A

1) D’S NAME

2) SP’S NAME

3) AN IDENTIFICATION OF COLLATERAL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

GOODS

A

ALL THINGS THT ARE MOVEABLE WHEN A SI ATTACHES

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

CONSUMER GOODS

A

1) USED FOR PERS, FAM, OR HOUSEHOLD PURP

OR

2) BOUGHT FOR USE FOR PERS, FAM, OR HOUSEHOLD PURP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

FARM PRODUCTS

A

1) D IS A FARMER &

2) COLLATERAL IS CROPS, LIVESTOCK, SUPPLIES USING IN FARMING OR UNMANUFACTURED PRODUCTS OF CROPS/LIVESTOCK

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

INVENTORY

A

1) NOT FARM PRODUCTS

2) HELD FOR SALE OR LEASE

OR

3) RAW MATERIALS, WORK IN PROCESS, AND MATERIAL USED OR CONSUMED IN BUSINESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

EQUIPMENT

A

GOODS

NOT CG, FARM PRODUCTS, OR INVENTORY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

RIGHTS TO PAYMENT AS COLLATERAL

A

1) ACCOUNT

2) INSTRUMENT

3) CHATTEL PAPER

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

ACCOUNT

A

1) RIGHT TO PAYMENT OF A MONETARY OBLIGATION

I) FOR PROPERTY THT HAS BEEN SOLD

II) FOR SERVICE RENDERED/TO BE

2) NEED NOT B EARNED BY PERFORMANCE

3) NOT SECURED BY SI

** EX: UNSECURED PROMISE TO PAY FOR GOODS IN 60 DAYS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

INSTRUMENT

A

AN ART 8 “NEGOTIABLE INSTRUMENT”

  • WRITTEN MONETARY OBLIGATION TRANSFERRED BY DELIVERY AND INDORSEMENT

**TYPICALLY A CHECK OR A PROMISSORY NOTE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

CHATTEL PAPER

A

A WRITING OR WRITING THT BOTH

1) EVIDENCE A MONETARY OBLIGATION AND

2) CREATE A SI OR LEASE IN SPECIFIC PROPERTY

** EX: RETAIL INSTALLMENT SALES K

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

CREATING A PERFECTED SI

A

1) ATTACHMENT +

2) PERFECTION

EX OF PERFECTION:

A. FILE FS
B. SP TAKES POSSESSION
C. AUTOMATIC
D. CONTROL (BANK ACCT)
E. NOTATION ON CERTIFICATE OF TITLE (CAR)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

ATTACHMENT: “VALUE HAS BEEN GIVEN”

A

IMMEDIATE EXTENSION OF CREDIT

BINDING COMMITMENT TO EXTEND CREDIT

AS SECURITY FOR AN ANTECEDENT DEBT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

ATTACHMENT: “D’S RIGHTS IN THE COLLATERAL”

A

A D CAN ONLY TRANSFER A PROP INT (LIKE A SI) IN PROPERTY IN WHICH THEY HAVE RIGHTS

“D OWNS COLLATERAL/BECOMES OWNER”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

ATTACHMENT: A SA

A

1) AN AGREEMENT THT CREATES OR PROVIDES FOR SI

2) AUTHENTICATION: SIGNATURE

3) DESCRIPTION OF THE COLLATERAL: MUST REASONABLY IDENTIFY BUT NEED NOT B SPECIFIC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

SA: DESCRIPTION OF THE COLLATERAL

A

1) SPECIFIC LISTING
“MODEL NO. 123456”

2) CATEGORY
“ALL WASHING MACHINES, FRIDGES, OVENS..”

3) TYPE
“ALL INVENTORY” (NOT PERMITTED FOR CONSUMER GOODS IN CONSUMER TRANSACTION)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

SA: DESCRIPTION OF COLLATERAL

DEFICIENT DESCRIPTION

A

SUPERGENERIC DESCRIPTION NOT PERMITTED

“ALL ASSETS” OR “ALL PERSONAL PROPERTY” IS INSUFFICENT

No prohibition against granting a security interest in all personal property

Security agreement must list: E.g., “All accounts, chattel paper, deposit accounts, equipment, general intangibles, instruments, inventory, and investment property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

SA: AFTER ACQUIRED COLLATERAL

A

SA MAY INCLUDE AFTER ACQUIRED PROP CLAUSE

PERMITS SP TO ACQUIRE AN INT IN COLLATERAL D ACQUIRES AFTER SIGNING SA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

LIMITATION ON CONSUMER GOODS IN “AFTER ACQUIRED COLLATERAL”

A

consumer goods limited to property acquired w/in 10 days of the SP giving value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

SA: ALTERNATIVES

A

1) SP TAKES POSSESSION OF GOODS

2) SP TAKES “CONTROL” OF A DEPOSIT ACCT

3) SP TAKES “DELIVERY” OF STOCK CERTIFICATE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

SP TAKES POSSESSION OF GOODS

A

SP has possession of the collateral

Possession is “pursuant to” the debtor’s security agreement

The collateral is NOT a certificated security (i.e., NOT a stock certificate)

The collateral is a kind as to which the SP may perfect its security interest by taking possession of it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

SP TAKES “CONTROL” OF A DEPOSIT ACCT

A

SP has “control” of the collateral

Control is “pursuant to” debtor’s security agreement

Collateral is a deposit account (checking, savings, passbook, etc.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

PERFECTION: PROCESS OF PROVIDING NOTICE

A

1) UNPERFECTED SI IS ENFORCEABLE AGAINST THE DEBTOR

  • ATTACHMENT CREATES A SI IN COLLATERAL
  • UNPERFECTED HAS THE RIGHT TO REPOSSESS

2) PERFECTION MAXIMALLY PROTECTS SP AGAINST RIVAL CLAIMS

3) PERFECTION PROVIDES PUBLIC NOTICE OF SP’S POSSIBLE SI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

PERFECTION: MAIN METHODS

A

1) FILING A FS

2) POSSESSION

3) CONTROL

4) AUTOMATIC

5) NOTATION ON C.O.T

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

FILING A FS

A

REQ’D: ACCOUNTS, GENERAL INTANGIBLES

PERMITTED: GOODS, INSTRUMENTS, CHATTEL PAPER, INVESTMENT PROP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

POSSESSION OF THE COLLATERAL BY THE SP

A

REQ’D: MONEY

PERMITTED: GOODS, INSTRUMENTS, CHATTEL PAPER, INVESTMENT PROPERTY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

CONTROL OF THE COLLATERAL BY SP

A

REQ’D: DEPOSIT ACCTS

PERMITTED: INVESTMENT PROP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

AUTOMATIC PERFECTION

A

PMSI IN CONSUMER GOODS

ASSIGNMENT OF ACCTS WHICH DOES NOT TRANSFER A SIGNIFICANT PART OF THE ASSIGNORS OUTSTANDING ACCTS TO THE SAME ASSIGNEE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

NOTATION ON C.O.T

A

REQ’D: AUTOMOBILE, TRUCKS, OTHER VEHICLES COVERED BY A STATE CERTIF OF TITLE STATUTE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

FS: WHERE TO FILE

A

THE RIGHT STATE

THE RIGHT OFFICER

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

FS: THE RIGHT STATE

A

WHERE THE D IS LOCATED

INDIVIDUAL D’S: PRINCIPAL RESIDENCE

ORGS
(NON-REGISTERED/PARTNERSHIPS): A PLACE OF BUSINESS OR CHIEF EXEC OFFICE ( IF MORE THAN ONE PLACE OF BUSINESS)

ORGS (REGISTERED/ CORPS, LLCS) STATE WHERE IT HAS FILED ITS PUBLIC ORGANIC RECORD

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

FS: THE RIGHT OFFICE

A

MOSTLY: OFF OF SEC OF STATE

In personal property related to land: the office for filing a mortgage on the related real property
- As-extracted collateral (oil and gas immediately after extraction)

  • Timber to be cut (trees still growing but slated to be cut down and sold)
  • Fixtures (goods “permanently” affixed to real property)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

FS: AUTHORIZATION TO FILE

A

A PERSON MAY FILE A FS NAMING A D ONLY IF D HAS AUTHORIZED FILING

38
Q

FS: TWO METHODS OF AUTHORIZATION

A

1) EXPRESS AUTHORIZATION: D SIGNS A DOC AUTH FILING

2) IPSO FACTO: D DEEMED TO AUTH FILING ANY FS THT COVERS COLLATERAL DESCRIBED IN SA

39
Q

PENALTIES FOR UNAUTHORIZED FILING

A

1) ACTUAL DAMAGES PROVED

2) $500 STATUTORY PENALTY FOR EACH UNAUTH FILING, REGARDLESS OF ACTUAL DAMAGES

40
Q

FS CONTENTS: 3 REQ’D ELEMENTS

A

1) NAME OF THE D
2) NAME OF SP
3) INDICATION OF COLLATERAL

41
Q

FS: NAME OF D: REGISTERED ORGS

A

NAME ON PUBLIC ORGANIC RECORD (LIKE ARTICLES OF CORP)

42
Q

FS: NAME OF D: NON REGISTERED ORG (LIKE PARTNERSHIPS

A

NAME GIVEN IN PARTNERSHIP AGREEMENT(IF THERE IS ONE)

NAMES OF INDIV PARTNERS (IF NO OFFICIAL NAME)

43
Q

FS: NAME OF THE D: INDIVIDUALS

A

MAJORITY: MANDATORY- NAME ON DL (IF THERES ONE)

MINORITY: NAME ON DL PERMITTED BUT NOT REQ’D

44
Q

FS: ERRORS

A

A FS IS SUFFICIENT: EVEN IF HAS MINOR ERRORS OR OMISSIONS, UNLESS THEY MAKE THE FS SERIOUSLY MISLEADING

45
Q

FS: ERRORS: SPECIAL RULES FOR D’S NAME

A

A FS THT FAILS SUFFICIENTLY TO PROVIDE THE NAME OF THE D IS SRSLY MISLEADING

EXCEPTION: IF A SEARCH USING FILING OFFICE STNDRD SEARCH LOGIC WOULD DISCLOSE: NOT SRSLY MISLEADING

46
Q

FS: INDICATION OF COLLATERAL

TWO WAYS THE FS MAY INDICATE THE COLLATERAL

A

1) DESCRIPTION OF COLLATERAL SUFF FOR SA
- SPECIFIC LISTING
-CATEGORY
-ART 9 COLLATERAL TYPE

2) A SUPER GENERIC DESCRIPTION LIKE “ALL ASSETS OR ALL PERSONAL PROP”

(PERMISSIBLE BUT UNNECESSARY TO SPECIFY “AFTER-ACQ’D COLLATERAL” OR “PROCEEDS” IN FS

47
Q

DOES THE PARTY HAVE A SI: TWO COMMON EXAMPLES

A

RETENTION OF TITLE

SALES OF ACCOUNTS, INSTRUMENTS, OR CHATTEL PAPER

48
Q

RETENTION OF TITLE

SALES K: “Seller retains title to the goods sold hereunder until Buyer has paid the purchase price in full.”

EFFECT?

A

reservation of a security interest.

49
Q

SALES OF ACCTS, INSTRUMENTS, OR CHATTEL PAPER

Sale of goods on open account
(i.e., buyers make an unsecured promise to pay in 30, 60, or 90 days).

Seller then assigns accounts to Financer.

Note: Retailer could have borrowed money from Financer and explicitly granted a security interest in the accounts to secure repayment of the loan.

EFFECT?

A

The sale of accounts is treated as creating a security interest.

Retailer is the “debtor,” and Financer is the “secured party.”

Also: instruments and chattel paper

50
Q

LEASES OR “DISGUISED” SI’S

TRUE LEASE

A

lessee pays for the right to use the goods for a period.

At lease end, goods still have value, and residual value reverts to the lessor.

51
Q

LEASES OR “DISGUISED” SI’S

FINANCED SALE

A

buyer pays to obtain the entire value of the collateral.
No residual value to return at end of payment term.

52
Q

THE FOUR ALT TEST

A

1) ORG TERM OF THE LEASE IS EQUAL TO OR GREATER THAN THE REMAINING ECONOMIC LIFE OF THE GOODS

2) LESSEE IS BOUND TO RENEW LEASE FOR REMAINING ECONOMIC LIFE OF GOODS OR IS BOUND TO BECOME OWNER OF THE GOODS

3) THE LESSEE HAS AN OPTION TO RENEW THE LEASE 4 THE REMAINING ECONOMIC LIFE OF THE GOODS FOR NO OR 4 NOMINAL ADDT’L CONSIDERATION

4) THE LESSEE HAS AN OPTION TO BECOME THE OWNER OF THE GOODS FOR NO OR FOR NOMINAL ADDT’L CONSIDERATION

53
Q

The “Bright Line” or “Per Se” Test determines when a “lease” will be deemed a financed sale with a security interest. A two-part test:

A

1) consideration lessee pays for right to use goods is an obligation for the term of the lease and not subject to termination by the lessee.

  • I.e., the lessee cannot opt to cancel the lease early and avoid paying more rent.

(2) One of four alternatives, the effect of which is that there is no residual value in the goods to return to the “lessor.”
I.e., in effect, the lessee has purchased the goods.

54
Q

PRIORITIES ANSWER TEMPLATE

A

1) CLASSIFY COLLATERAL

2) DETERMINE STATUS OF CLAIMANTS

ART 9 SP
1) ATTACHMENT (SA, Value, D rights)
2) PERFECTION (FS, SP possession)
3) PMSI

OTHER CREDITOR
-LIEN CREDITOR
-REAL ESTATE CLAIMANT (MORTGAGEE)

BUYER OR OTHER TRANSFEREE OF COLLATERAL

3) APPLY RELEVANT PRIORITY RULES

55
Q

UNPERFECTED SP V UNPERFECTED SP

A

FIRST TO ATTACH

56
Q

PERFECTED SP V UNPERFECTED SP

A

PERFECTED

57
Q

PERFECTED SP V PERFECTED SP

A

FIRST TO FILE OR PERFECT; WHICHEVER ONE IS EARLIER

58
Q

SP V LIEN CREDITOR

A

1) SI PERFECTED B4 A LIEN ARISES HAS PRIORITY

2) SI IS SUBORDINATE TO LIEN THT ARISES B4 THE SI IS PERFECTED

59
Q

SP V BANKRUPTCY TRUSTEE

A

A TRUSTEE HAS RIGHTS A LC WOULD HAVE IF THE LIEN AROSE WHEN THE BANKRUPTCY PETITION WAS FILED

60
Q

SELLER’S PMSI

A

THE SI IN COLLATERAL SECURES THE BUYERS OBLIGATION TO PAY ALL OR A PART OF THE PURCHASE PRICE OF THE COLLATERAL

61
Q

LENDERS PMSI

A

SI IN COLLATERAL SECURES A BORROWERS OBLIGATION TO REPAY THE VALUE GIVEN TO ENABLE THE BORROWER TO ACQUIRE RIGHTS IN THE COLLATERAL IF THE VALUE WAS IN FACT USED FOR THT PURPOSE

62
Q

SPECIAL PMSI PRIORITIES

(EXCEPTIONS TO GENERAL RULES)

A

1) PERFECTED PMSI V LIEN CREDITOR ( OR BUYER)

2) PERFECTED PMSI V PERFECTED SP (EQUIPMENT)

3) PERFECTED PMSI V PERFECTED SP (INVENTORY)

63
Q

1) PERFECTED PMSI V LIEN CREDITOR (OR BUYER)

A

1) SP HAS A PERFECTED PMSI

2) FILES A FS B4 OR W/IN 20 DAYS AFTER THE D RECEIVES DELIVERY OF THE GOODS

3) HAS PRIORITY OVER A LIEN CREDITOR OR BUYER WHOSE INT ARISES B/W THE TIME THE SI ATTACHES AND THE TIME OF FILING

64
Q

2) PERFECTED PMSI V PERFECTED SP (EQUIPMENT)

A

1) SP HAS A PERFECTED PMSI IN NON INVENTORY

2) PMSI IS PERFECTED WHEN THE D GETS POSSESSION OF THE COLLATERAL OR IS PERFECTED W/IN 20 DAYS THEREAFTER

3) HAS PRIORITY OVER A CONFLICTING INT IN THE SAME COLLATERAL

65
Q

PERFECTED PMSI V PERFECTED SP (INVENTORY)

A

1) SP HAS A PERFECTED PMSI IN INVENTORY

2) PMSI IS PERFECTED WHEN THE D GETS POSSESSION OF THE INVENTORY

3) PMSI HOLDER
- SENDS NOTICE TO COMPETING SP

  • W/IN 5 YRS OF THE D’S TAKING DELIVERY OF THE INVENTORY
  • STATING PMSI HOLDER PLANS TO OBTAIN A PMSI IN INVENTORY AND DESCRIBING THE INVENTORY

4) HAS PRIORITY OVER A CONFLICTING INT IN THE SAME INVENTORY

66
Q

EQUIPMENT PMSI PRIORITY

TIME OF PERFECTION?

NOTICE TO EARLIER SP?

A

1) Must be perfected before debtor obtains possession of the collateral or within 20 days thereafter.

2) No notice req

66
Q

INVENTORY PMSI

TIME OF PERF?

NOTICE TO EARLIER SP?

A

1) MUST B PERFECTED B4 D RECEIVES POSSESSION OF THE COLLATERAL

2) MUST NOTIFY A PRIOR INVENTORY FINANCER THT IT IS ACQ A SI IN INVENT AND DESCRIBE THT INVENTORY

67
Q

BUYERS OF COLLATERAL: GENERAL RULE:

A

A SI SURVIVES THE D’S SALE OF THE COLLATERAL

  • SI ENFORCEABLE AGAINST BUYERS OF THE COLLATERAL
  • SI CONTINUES IN COLLATERAL DESPITE SALE
68
Q

BUYERS OF COLLATERAL: EXCEPTIONS

A

1) SP AUTH SALE FREE OF SI

2) UNPERFECTED SI

3) BUYERS IN THE ORD COURSE OF BUSINESS

4) CONSUMER TO CONSUMER SALE (GARAGE SALE)

69
Q

THE EXCEPTIONS: BUYER IN THE ORD COURSE:

A

A BUYER IN THE ORD COURSE OF BUSINESS

  • TAKES FREE OF A SI
  • CREATED BY HIS SELLER

-EVEN IF IT IS PERFECTED &

  • EVEN IF HE KNOWS OF ITS EXISTENCE
69
Q

A BUYER IN THE ORD COURSE OF BUSINESS

A

1) MUST BUY GOODS

2) IN GOOD FAITH

3) W/O KNOWLEDGE THT THE SALE VIOLATES THE RIGHTS OF ANOTHER PERSON IN THE GOODS AND

4) I N THE ORD COURSE FROM A PERSON (OTHER THAN A PAWN BROKER) IN THE BUSINESS OF SELLING GOODS OF THT KIND

70
Q

THE EXCEPTIONS: CONSUMER TO CONSUMER SALE:

A BUYER OF GOODS TAKES FREE OF SI IF IT

A

1) BUYS FROMA CONSUMER (PERS, FAM, HOUSEHOLD USE)

2) PRIMARILY FOR HIS OWN PERS, FAM, OR HOUSEHOLD PURP

3) FOR VALUE

4) W/O KNOWLEDGE OF THE SI AND

5) B4 A FS COVERING THE GOODS IS FILED

71
Q

AUTHORIZED SALES

A BUYER OF COLLATERAL TAKES FREE OF A SI IF

A

SP HAS AUTH SALE OF THE COLLATERAL FREE OF THE SI

72
Q

UNPERFECTED SI

A BUYER OF THE COLLATERAL TAKES FREE OF AN UNPERFECTED SI IF

A

1) IT GIVES VALUE AND

2) TAKES DELIVERY OF THE COLLATERAL

3) W/O KNOWLEDGE OF SI

73
Q

PMSI V BUYER (EXCEPTION TO UNPERFECTED SP)

SPECIAL RULE FOR PMSI V BUYER

A

if a PMSI SP files a FS
- before or within 20 days

  • after D receives delivery of collateral,
  • the SI takes priority over the rights of

1) a buyer,
2) lessee, or
3) lien creditor

  • which arise b/w time the SI attaches and time of filing.
74
Q

PROCEEDS

A

W/E IS ACQUIRED UPON SALE, LEASE, LICENSE, EXCHANGE, OR OTHER DISPO OF COLLATERAL

75
Q

WHEN DOES A SI INCLUDE PROCEEDS

A

ALMOST ALWAYS

A SI ATTACHED TO ANY IDENTIFIABLE PROCEEDS OF COLLATERAL

  • SA NEED NOT SPECIFY A RIGHT TO PROCEEDS
  • FS NEED NOT MENTION PROCEEDS
76
Q

PERFECTION IN PROCEEDS

BASIC RULE

A

A SI IN PROCEEDS IS PERFECTED IF THE SI IN THE ORG COLLATERAL WAS PERFECTED

77
Q

LAPSE OF PERFECTION IN PROCEEDS

A

THE SI IN PROCEEDS BECOMES UNPERFECTED IN THE 21ST DAY FOLLOWING ATTACHMENT TO THE PROCEEDS

78
Q

CONTINUITY OF PERFECTION IN PROCEEDS

THE SI REMAINS PERFECTED IF

A

1) THE SAME OFFICE RULE IS MET
- a FS covers the org collateral
- a SI in the proceeds may be perfected by filing in same office where the FS has been filed
-proceeds were not acq’d w cash proceeds

2) CASH PROCEEDS RULE IS MET
- SI in the proceeds remains perfected if they are identifiable cash proceeds

3) ALT PERFECTION RULE IS MET
- SI in the proceeds is perfected by

-some method other than temporary automatic perfection either when it attaches or

-w/in 20 days of attachment

79
Q

DEFAULT

A

DEFINED BY THE PARTIES

80
Q

REPOSSESSION

A

SELF HELP REPOSSESSION PERMISSIBLE IF DONE W/O
“BREACH OF THE PEACE”

  • NO USE OF FORCE/THREAT OR OR OTHER CONDUCT LIKELY TO PROVOKE PRESENT VIOLENCE
  • MERE TRESPASS OK

-BREAKING AND ENTERING FORBIDDEN

  • REPO AGENT MUST RETREAT IF FACE TO FACE OBJECTION
  • USE OR IMPERSONATION OF PEACE OFFICER- FORBIDDEN

-TRICKERY PROB OK; FRAUD IS PROB NOT

81
Q

ALTS TO REPOSSESSION

EQUIPMENT

A

AFTER DEFAULT, A SP W/O REMOVAL, RENDER EQUIP UNUSABLE AND DISPOSE OF IT ON THE D’S PREMISES

82
Q

ALT TO REPOSSESSION

ACCOUNTS

A

SP MAY NOTIFY THE ACCOUNT DEBTOR TO MAKE PAYMENTS TO THE SP RATHER THAN TO THE D

  • B4 NOTIFICATION OF ASSIGNMENT, ACCOUNT DEBTOR MAY CONTINUE PAYING THE DEBTOR/ASSIGNOR

-AFTER RECEIPT OF NOTIFICATION, ACCT DEBTOR MAY DISCHARGE ITS OBLIGATION ONLY BY PAYING THE SP/ASSIGNEE & MAY NOT DISCHARGE ITS OBLIGATION BY PAYING THE D/ASSIGNOR

83
Q

DEBTOR PROTECTION

SP DISPOSES OF THE COLLATERAL:

A

1) NOTICE OF RESALE

2) COMMERCIAL REASONABLENESS

84
Q

NOTICE OF RESALE

A

TIME OF NOTICE: REASONABLE

  • NON CONSUMER CASES: 10 DAYS NOTICE PRESUMPTIVELY REAS

EXCEPT:collateral that
(i) is perishable,
(ii) threatens to decline speedily in value, or
(iii) is of a type customarily sold on a recognized market

WAIVABLE ONLY BY AGREEMENT AUTHENTICATED AFTER DEFAULT

85
Q

COMMERICAL REASONABLENESS

A

EVERY ASPECT OF SALE- METHOD, MANNER, TIME, PLACE MUST B COMM. REAS.

86
Q

D’S REMEDIES FOR SECURED PARTY NON COMPLIANCE

A

1) INJUNCTIVE RELIEF (RARELY POSSIBLE)

2) DAMAGES
- ACTUAL (MUST B PROVED) OR STATUTORY DAMAGES (IN CONSUMER CASES)

  • STATUTORY DAMAGES (CONSUMER CASES ONLY): 10% OF PRINCIPAL PLUS AMT OF INT
87
Q

EFFECT ON DEFICIENCY

A

Commercial cases: rebuttable presumption rule

The D is credited with the greater of
(1) the actual proceeds of the disposition or
(2) the proceeds that would have been realized had the secured party complied.

Unless SP proves a complying disposition would have yielded a lower amount than the actual disposition,

-the amt a complying disposition would have yielded = amt of the secured debt plus expenses and attorney’s fees.

Consumer cases: left for courts to decide

88
Q

D’S RIGHTS

A

1) STRICT FORECLOSURE

2) D’S RIGHT OF REDEMPTION

89
Q

STRICT FORECLOSURE

A

In lieu of suing for deficiency, SP accepts collateral to satisfy debt.

Requires express post-default written consent of debtor

Debtor deemed to consent by failing to object within 20 days of SP’s written proposal

90
Q
A

100 (21 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions