Secured Transactions Flashcards
What are goods?
Movable tangible property
What are rights to payment?
Instruments, chattel paper, accounts, payment intangibles
What is attachment?
An arrangement linking a debt to collateral, upon attachment interest becomes enforceable.
Requires value given, the debtor to have rights, and either a security agreement or possession/control
What is required in a security agreement?
Identify collateral, shows inten tof debtor to be bound, and is in a tangible medium
Accessions are?
Goods that are united with another good but are identifiable. The security interest continuous in the accession.
Commingled goods are?
A good that is united but the identity of the good is lost. The security interest transfers to the larger good.
Proceeds are?
Whatever is exchanged for the collateral. The security interest in the collateral attaches to the proceeds automatically.
Perfection can occur by?
Filing, possession/control, automatic perfection, or alternate perfection systems (like for car registration)
Filing a financing statement can perfect all interests except those in?
Deposit accounts, cars, money, and letters of credit
Where must a financing statement be filed to perfect an interest?
For everything except interests in real property, filing is in the central filing office where the DEBTOR is located. This is the state of incorporation for a corporation or the principal residence of individuals.
For real property interests, it is filed in the county where toe property is located.
Financing statements require what information to perfect an interest?
The names of the parties, the description of the collateral and if it is for real property, name of the record owner and describe the property.
What information is non essential to perfect but will cause the financing statement to be refused at the office?
Addresses of the parties and an indication of whether the debtor is an individual or a corporation.
A mistake in a financing statement will only affect perfection if it is?
Seriously misleading.
Financing statements lapse after ___ years but may be continued within ___ months before lapsing.
Five, Six.
A security interest in money can only be perfected by?
Possession
Interests in deposit accounts and letter of credit rights can only be perfected by?
Control
A PMSI in ____ will automatically perfect.
Consumer goods.
Priority between Perfected int v. perfected int? (Non-PMSI)
First in time to file OR perfect
Priority between perfected v unperfected? (Non-PMSI)
Perfected wins
Priority between two unperfected? (Non-PMSI)
first to attach or become effective
Perfected v Lien creditor?
Perfected wins
Unperfected v lien creditor?
Lien creditor wins unless the secured party has already filed a financing statement, the debtor has authenticated the security agreement, and the secured party hasnt given value yet.
Sec int v statutory lien
Statutory lien wins if the lien 1) is effective based on possession of the goods, and the lien is for payment or performance of an obligation furnished in the ordinary course of business.
Sec party v sec party over future advances?
First to file or perfect
A buyer takes subject to a perfected security interest unless?
The secured party authorizes the sale is free and clear, the buyer is in the ordinary course of business, or it is a consumer to consumer buyer.
What is a buyer in the ordinary course of business?
A buyer who buys goods from a merchant, in the ordinary course of that business, in good faith and without notice of the security interest.
What is a consumer to consumer buyer?
Buyer buys consumer goods, for their own consumer use, froma consumer seller, without knowledge of the security interest. (This does not apply if there is a financing statement covering the goods).
A buyer takes subject to an unperfected interest unless?
The buyer gives value, receives the collateral, and doesnt know of the interest.
PMSI v lien creditors
Same as usual, if perfected PMSI if unperfected lien creditors, but a 20 day grace period to perfect where the interest is considered perfected.
PMSI v sec interests
PMSI in goods other than inventory take priority over all other interests no matter whne perfected if perfected within 20 days (otherwise its first in time to file or perfect).
PMSI in inventory has priority over all other interests in that inventory when?
If the PMSI is perfected before delivery and the holder sends an authenticated notification to the other secured parties.
PMSI v PMSI
Seller beats lender, otherwise apply the first to file or perfect rule.
Are leases never governed by UCC art 9?
No, only true leases. Look to whether the “lease” is actually a secured transaction.
How are proceeds distributed after disposition?
1) reasonable expenses for collection/enforcement, 2)pay the debt to the foreclosing party, 3)pay subordinate interest if there is a formal demand, 4) return the surplus to the debtor. Senior security interests survive in the collateral!.
