Secured Transactions Flashcards
Consumer goods
goods used or bought for personal, family or household purposes
Farm products
crops, livestock, umanufactured products and supplies used in farm operations in possession of or used by a farmer
Inventory
goods held for sale or lease and goods used in business that are consumed in short order
Equipment
Goods that aren’t consumer goods, farm products ,or inventory (e.g. durable goods used in business, paintings on an office wall)
What category is this collateral:
manure sold by debtor’s agricultural supply store
Inventory
Tangible Collateral
All things movable at the time the security interest attaches, except money
What are the 4 types of tangible collateral under Article 9?
consumer goods
equipment
inventory
farm products
What are the 8 types of intangible property?
General intangible
Investment property
Accounts
Deposit accounts
Documents
Instruments
Chattel paper
Tort claims (commercial))
Instrument
Paper that represents the right to be paid money
Documents
papers that represent the right to receive goods
Investment property
Stocks, bonds, mutual funds, brokerage accounts
What is required for a secured interest to attach to collateral?
(1) Security agreement evidenced by writing or creditor’s possession of collateral
(2) Secured party gives value
(3) Debtor has rights in collateral
When does a PMSI arise?
(1) when creditor sells goods to debtor on credit and retains security interest in the goods for all or part of purchase price.
(2) when creditor advances funds used by debtor to purchase collateral and the creditor takes an security interest in that collateral
How may a security interest in equipment be perfected?
by filing a financing statement OR
by creditor’s possession of the collateral
What collateral may be perfected by filing?
Everything except deposit accounts and money (unless either is claimed as proceeds of other collateral)
What collateral may be perfected by control?
ONLY:
investment property
nonconsumer deposit accounts and
electronic chattel paper
Where are most financing statements filed in FL?
Florida Secured Transaction Registry
Where must a filing statement for a fixture be filed?
With the clerk of the circuit court of the county where the land sits
In addition to usual filing requirements of financing statement, a fixture filing must….
Provide a description of the real property to which the fixture is attached
Collateral may generally be described by category EXCEPT
(1) commercial tort claims
(2) consumer goods and
(3) consumer securities accounts
What must secured party do when posessing collateral?
Use reasonable care in storing and preserving collateral
Risk of loss is on whom when secured party possesses collateral?
On debtor to extent of insurance coverage deficiency
May a secured party repledge collateral (i.e. use it as collateral for another obligation)?
Yes
A secured party may hold as additional collaterall….
any increase in value of or profits from collateral (except money)
What is required information in a financing statement?
(1) debtor’s name and address
(2) creditor’s name and address
(3) description of collateral (may be supergeneric)
(4) debtor’s authorization
Conflicting security interests perfected by filing
Priority goes to first party to either file or perfect
Automatic perfection
PMSI in consumer goods perfected as soon as it attaches
Security interests in noninventory motor vehicles can be perfected only by
Notation on vehicle’s certificate of title (even if consumer good)
Security interests in nondeposit accounts can be perfected by
secured party taking control of account
Who has automatic control over a nonconsumer deposit account?
The bank where nonconsumer deposit account is maintained
How can a secured party (not a bank) get control over a nonconsumer deposit account?
(1) putting deposit account in secured party’s name OR
(2) agreeing in authenticated record w debtor and bank that bank will comply with secured party’s orders regarding deposit account.
can a secured interest in deposit accounts and money be perfected by filing a financing statement?
no (but if deposit account is claimed as proceeds of other collateral, a filed security interest in original collateral automatically perfects a security interest in the proceeds)
If a deposit account is claimed as the proceeds of other collateral…
a filed security interest in the original collateral automatically perfects a security interest in the proceeds.
What security interests may be perfected by possession?
security interests in tangible collateral, such as equipment
A filing of a financing statement is effective for…
5 years from the date of filing
continuation statements may be filed..
within the last 6 months of the effective period.
whose authorization is necessary for a continuation statement?
secured party’s only
if a secured party violates article 9’s default rules…
the value of the collateral is presumed equal to the amount of debt unless proven otherwise
A PMSI in goods other than inventory or livestock has priority over conflicting interest in the same goods and proceeds only if…
the interest is perfected before or within 20 days after the debtor receives possession of the goods
What may a secured party do if the debtor defaults on security agreement?
(1) use self help w/o judicial process if she can do so w/o breach of peace
(2) may sell, lease, license collateral by public sale, private sale, or contract
(3) may keep collateral to satisfy debt or
(4) may bring ordinary judicial action for amounts due and levy on collateral
Proceeds
whatever is received upon the sale, lease, exchange, license, collection or other disposition of collateral or proceeds.
Future advances
funds secured party has agreed to loan debtor in future
What is the effect if a security agreement contains a future advance clause?
No new security agreement is needed when future loan is made
After acquired property clauses are ineffective as to
commercial tort claims
After acquired property clauses are effective for consumer goods only if
debtor acquires rights in goods within 10 days after creditor gives value
