Secured's Rights & Remedies Default

Question 1

After default, a secured party may…

Answer 1

…1) take possession of the collateral; and 2) without removal, render equipment unusable and dispose of collateral on premises

Question 2

Peaceful Repossession

Answer 2

Courts Examine:
1) where reposession took place
2) who was present
3) whether protests were made

breaking into property is breach

Question 3

Right to Dispose of Collateral

Answer 3

After default, a secured party may sell, lease, license, or otherwise dispose of collateral in a commercially reasonable manner

Question 4

Notice of Disposition

Answer 4

A secured party that disposes collateral MUST send an authenticated notification of disposition to the debtor/secondary obligor

liable for damages if fail notice

Question 5

Disposition at Foreclosure

Answer 5

The disposition at foreclosure:
1) transfers all debtor’s rights to a transferee
2) discharges security interest
3) discharges subordinate security interests

good faith transferee takes free

Question 6

Commercially Reasonable Sale

Answer 6

Every aspect including method, manner, time, place, and other terms must be commercially reasonable.

Question 7

Factors for Commercially Reasonable Sale

Answer 7

1) advertising
2) normal commercial practices
3) time between repo and sale
4) sale price

no one factor is conclusive

Question 8

Deemed Commercially Reasonable by Law

Answer 8

1) in usual manner or any recognized market,
2) at current price in recognized market, or
3) in comformity with practices in similar community

Question 9

Secured Party’s Purchase of Collateral

Answer 9

Secured party may purchase at:
1) public sale, or
2) private sale only if kind customarily sold on recognized market or subject of widely distributed standard price quotations.

Question 10

Right to Collect from an Account Debtor

Answer 10

A secured party has right to collect debt directly from an account debtor if agreed or after default.