Secured Transactions Flashcards
What is attachment?
A security interest that is enforceable against the debtor with respect to the collateral is said to have “attached” to the collateral
Requirements for attachment
(1) value given by the secured party; (2) the debtor has rights in the collateral; and (3) either the debtor has authenticated a security agreement that describes the collateral or the secured party possesses the collateral
Security agreement must satisfy _________
Statute of frauds
PMSI can be in what two types of collateral
Goods and software
PMSI in Goods exists when
(1) A secured party gave value to the debtor that enabled the debtor to acquire goods and the value given was so used; OR
(2) A secured party sold goods to the debtor, and the debtor incurred an obligation to pay the secured party all or part of the purchase price
How to perfect?
Attachment + one of the methods of perfection
What does perfection do?
Creates superior rights in the collateral for secured party over third parties rights in the collateral
Methods of perfection
(1) Filing a financing statement; (2) possession; (3) Control; and (4) automatic perfection
What types of collateral is filing a financing statement a method of perfection for?
All except for deposit account, money, or letter-of-credit rights
What is needed for a proper financing statement?
Must include (i) debtor’s name; (ii) the secured party’s name; and (iii) a description of the collateral.
File with state corporation commission
How to perfect a security interest in stock
a creditor may perfect its security interest by either filing a financing statement with the Virginia State Corporation Commission or by taking control of the stock
How to Perfect a Security Interest in Deposit Accounts
Control or Possession (if you’re the bank)
Description of the collateral must be ___________________
sufficiently indicate the collateral
Mechanic’s Lien for Mechanic
A mechanic is entitled to a mechanic’s lien of up to and including $1000 superior to prior security interests. Anything over $1000 is inferior to a prior security interest
Timing for Perfecting Mechanic’s Lien
ust file a memorandum of lien no later than 90 days from the last day of the month in which the contractor last performed labor or furnished material, and in no event later than 90 days from the time the structure is completed, or the work is otherwise terminated.
How to perfect an interest in a lien on an auotomobile
By having the lien noted on the title by registering the security interest with the DMV. NOT by filing a financing statement
Who has priority with two competing PMSIs?
The first to file.
EXCEPTION: a seller has priority over a lender
