Secured Transactions Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

“Security Interest”

A

Interest in personal property or fixtures that secure payment or performance of an obligation

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

Lease Purchase Agreements

A

A transaction will be deemed to create a SI rather than a true lease if:
(1) rental obligation is not terminable by the less and
(2) either:
(A) the lease term is equal to or greater than the remaining economic life of the goods;
(B) the lessee is bound to purchase the goods at the end of the lease or renew the lease for the remaining economic life of the goods; OR
(C) at the end of the lease, lessee has option to purchase goods/renew lease for no or nominal consideration

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

Retention of Title - SI?

A

If the buyer and seller of the goods agree that the seller will retain the title to the goods after they are delivered to the buyer and until the buyer pays for them –> the agreement is treated as seller’s retention of a SI (SI for the price)

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

Article 9 most notably does NOT apply to:

A

transactions involving interests in/liens on land (EXCEPT transactions involving fixtures)

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

“PMSI”

A

A special type of SI in goods that has priority over all over SI’s in the same goods if certain requirements are met… (see rules re PMSI in inventory; PMSI in non-inventory)

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

Three broad categories of collateral under UCC

How determine which type?

A

(1) tangible collateral or “goods”
(2) intangible or semi-intangible collateral
(3) proceeds

Determine type based on how the collateral is being used when the SI attaches/it comes into being

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

4 sub-categories of tangible collateral

A

(1) consumer goods
(2) inventory
(3) equipment
(4) farm products

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

“Consumer Goods”

A

Goods bought or used primarily for personal, family, or household purposes

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

“Inventory”

A

Goods held for sale or lease; goods to be furnished under a service K; materials that are used up quickly or consumed in a biz (ex. office supplies, raw materials)

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

“Equipment”

A

Catch all; all goods held by a BIZ that are NOT inventory

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

“Farm products”

A

Crops, livestock, manufactures products of livestock (ex eggs), & supplies used or produced in farming opperations
IF
they are in possession of a debtor engaged in farming operations

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

8 sub-categories of intangible/semi-intangible collateral

A

(1) instruments
(2) documents
(3) chattel paper
(4) investment property
(5) accounts
(6) deposit accounts
(7) commercial tort claims
(8) general intangibles

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

“Instrument”

A

Piece of paper that represents the right to be PAID MONEY

ex - drafts, checks, promissory notes, certificates of deposit

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

“Document”

A

Piece of paper that represents the right to RECEIVE GOODS

ex - bill of lading, warehouse receipt

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

“Chattel paper”

A

A record [writing or ESI] evidencing BOTH:

(1) a monetary obligation &
(2) a SI in or lease of goods

(ex - promissory note, written security agreement)

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

“Investment property”

A

Stocks, bonds, mutual funds, brokerage accounts

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

“Accounts”

A

Accounts maintained with a bank, such as a checking or savings account

(Art. 9 applies to NONCONSUMER deposit accounts, and to deposit accounts that are proceeds of other collateral)

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

“General intangible”

A

Catch all (ex - software, patent/TM rights, copyrights, good will)

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

“Proceeds”

A

Include whatever is received upon sale, lease, exchange, or other disposition of collateral or proceeds

Includes proceeds of proceeds

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

Rights btwn debtor and SP are established by:

A

Attachment

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

Rights btwn SP and 3rd parties (other creditors, buyers, etc.) are established by:

A

Perfection & priority rules

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

Attachment: A SI is not enforceable unless…

A

Unless it has attached

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

Attachment: 3 req’s for attachment:

A

(1) value has been given by SP;
(2) debtor has rights in the collateral; &
(3) the parties must agree to create a SI, as evidenced by either:
(A) SP takes possession of tangible collateral;
(B) SP takes control of intangible collateral; or
(C) the debtor’s authentication [signing/electronic marking with present intent to adopt] if security agreement properly describing the collateral

MUST coexist (once all 3 reqs met, attachment occurs)

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

Attachment: SA requirements:

A

Must be:

(1) authenticated by the debtor;
(2) properly describe the collateral

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

Attachment: rules regarding the description of the collateral in the SA:

A

The description of the collateral is sufficient if it “reasonably identifies” the collateral” (if ineffective, no SI attaches)

  • can be general or specific
  • can include UCC categories (unless CG’s)
  • CANNOT be “super generic” (“all debtor’s property”) *** compare with FS, can be super generic description
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Attachment: Scope of SI? May include?

A

Scope of SI: defined by the K (the SA)

May include: After-acquired property clause & future advances clause

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

Attachment: Scope of SI - does SA give a SP right in proceeds of the collateral if not mentioned in SA?

A

Rule: unless otherwise agreed, a SA automatically gives the SP a right to the proceeds of the named collateral (BUT SP must be able to identify the proceeds as proceeds of the collateral - 1st in, 1st out rule)

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

Perfection: Timing - Perfection of SI cannot be completed until…

A

Until it has attached

if you complete the steps to perfect (file FS) before attachment, SI will become perfected at the time it attaches (ie, perfection and attachment can occur simultaneously)

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

Perfection: Five methods of perfection

A

(1) Filing a UCC filing statement (FS) in the proper place
(2) possession
(3) control
(4) notation on certificate of title
(5) automatic perfection (PMSI in CG’s)

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

Perfection: the main purpose of the perfection requirement is to…

A

To give notice to the world that the SP has some interest in the debtor’s property

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

Automatic Perfection - PMSI in CG’s rule

A

A (1) PMSI in (2) CG is perfected automatically as soon as it attaches

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

“PMSI” can arise in 2 ways:

A

(1) Creditor sells the goods to debtor on credit and retains a SI in the goods for part/all the purchase price (creditor & seller = same); or
(2) creditor advances funds/gives loan for purpose of purchasing the collateral & the funds are actually used to purchase the collateral (& takes a SI in the goods) (creditor & seller = same)

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

Perfection by possession: when does it occur? how long does it last?

A

Perfection occurs at the moment of actual possession and continues so long as possession is maintained

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

What types of collateral can be perfected by control?

A

Control is effective perfection ONLY for: deposit accounts* (only way you can perfect DA’s); electronic chattel paper; and investment property

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

Deposit Accounts: How do you perfect? How do you gain control of a Deposit Account?

A

DA’s can be perfected ONLY by control

  • if the SP is the bank which maintains the DA: they automatically have control
  • if the SP is not the bank that maintains the DA: EITHER (1) put DA in SP’s name or (2) agreeing in authenticated record with the debtor and the bank that the bank will comply with the SP’s order regarding the deposit account without requiring the debtor’s consent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Perfection by notation on certificate of title: required to perfect SI’s in…..? exception?

A

Goods subject to COT laws (cars, boats, motor homes, etc.)

Big EXCEPTION: if SI is in a dealer’s inventory (cars in a car dealer’s inventory) for sale/lease: perfection must be completed by filing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Perfection by filing FS is effective for what classes of collateral?

A

Effective for all classes of collateral EXCEPT: DA’s (control); money (possession); COT goods
- filing FS would be ineffective

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Perfection by filing FS: A FS is effective (ie, have perfected SI) if:

A
(1) debtor must "authorize" the FS (if she authenticates the FS or a SA covering the same collateral)
\+
(2) Must contain:
(A) Debtor's correct legal name
(B) SP's name
(C) description of collateral
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Perfection by filing FS: FS’s are indexed by debtor’s “legal name” - if individual? if registered organization? if unregistered organization?

A

Debtor’s legal name:
- if individual –> must give debtor’s name as it appears on unexpired drivers license

  • if registered org (corp/LLC) –> official corporate name (must match public organic record)
  • if unregistered org (partnership) –> partnership name (partnership agreement?)
40
Q

Perfection by filing FS: What if there is an error in the debtor’s name on the filing statement?

A

If there is an error in the debtor’s name on the FS, the filing is ineffective UNLESS the error is minor/not “seriously misleading”

If a search of the filing system under the CORRECT name, using the system’s standard search logic, would turn up the INCORRECT filing — not a seriously misleading error

41
Q

Perfection by filing FS: what if debtor changes their name?

A

If the debtor changes their name, the FS is effective as to collateral acquired b4 the change AND within 4 months after

For collateral acquired after 4 month period, the SP must re-file using the debtors correct name

42
Q

Perfection by filing FS: rules regarding description of collateral in FS:

A

Must “reasonably identify” the collateral

  • can be general
  • can use USS categories
  • CAN use super-generic descriptions, unlike in SA
43
Q

Perfection by filing FS: how long is FS effective? can SP extend? what happens if they don’t?

A

Effective for 5 yrs from filing date

SP can file continuation statement, good for another 5 yrs BUT the CS can only be filed within 6 months before FS lapses

If the 5 yr period expires, FS “lapses” and the SI becomes unperfected (can re-file, but perfection begins from new file date)

44
Q

Perfection by filing FS: where is “proper place” to file FS? Exception?

A

Generally, filing must be done “centrally” in SOS office

Exception: fixture/timber/minerals - filing is “local” in the county recorder’s office RE records office where the RE is located

45
Q

Perfection by filing FS: which state do you file FS in? Exception?

A

General rule: the law of the state where the “debtor is located” governs perfection (file in that state’s SOS office)

  • for individuals: state of principal residence
  • for registered orgs (corps/LLCs): state under whose laws its organized/incorporated
  • for unregistered orgs (partnerships): its place of biz OR, if more than one, where its chief executive office is

EXCEPTION: for possessory interests & SI’s in fixtures/timber: covered by state where the collateral is located

46
Q

Perfection by filing: can FS be filed before SA is entered into?

A

Yes (done to secure earlier priority date - 1st to file/perfect wins)
- done very often

47
Q

Temporary perfection: when debtor moves?

A

When the debtor moves from one state to another, AND the location of the debtor determines which state governs perfection –> a SI in the collateral that was perfected in the original state will remain perfected without any further action from SP for 4 months after the D moves OR until perfection lapses in 1st state, whichever is earlier

This also applies to collateral that debtor acquired within that 4 month period

48
Q

Temporary perfection: proceeds?

A

A SI in proceeds from original collateral is continuously perfected for 20 days from debtor’s receipt of the proceeds

49
Q

Continuation of perfection in proceeds after the 20 day temporary perfection window:

A

SI in proceeds will continue to be perfected beyond 20 days if:
(1) SI in the proceeds is perfected within the 20 days;

(2) “same office rule” - (A) the SI in the original collateral was perfected by filing FS; (B) a SI in the type of collateral constituting proceeds would be filed in the same place as the FS for the original collateral; & (C) the proceeds were not purchased with cash proceeds of the collateral; or
(3) “cash proceeds rule” - the proceeds are identifiable cash proceeds

50
Q

Priority rules: they determine…

A

which party is entitled first to satisfy their claim out of the collateral

51
Q

Priority: if the collateral cannot satisfy all creditors…

A

the unsatisfied creditors claims are no longer secured; they are general, unsecured creditors

52
Q

Priority: unperfected SC vs. unperfected SC

A

1st to ATTACH has priority

53
Q

Priority: unperfected SC vs. perfected SC

A

A perfected SI generally prevails over unperfected SI

54
Q

Priority: perfected SC vs. perfected SC? “exceptions”?

A

General rule: 1st to file OR perfect - whichever occurs 1st - has priority
(provided there is no period thereafter where there is neither filing or perfection - ie, lapse)

“EXCPETIONS”:
If there is super-priority (PMSI’s in inventory/non-inventory - ie, equipment)
OR
control of investment property

55
Q

Priority: perfected SC v. perfected SC — PMSI’s - general rule?

A

Generally, PMSI’s have super-priority over other perfected SI’s (even if other’s perfected 1st) IF certain requirements are met…

56
Q

Priority: perfected SC v. perfected SC — PMSI in Inventory rule

A

A PMSI in inventory has priority over conflicting SI in the same collateral or proceeds IF:
(1) b4 the debtor receives possession,
(2) the SP perfects
AND
(3) gives written notice to holders of previously filed conflicting SI’s in the same collateral

57
Q

Priority: perfected SC v. perfected SC — PMSI in non-inventory (equip)

A

A PMSI in non-inventory (equip) has super-priority over conflicting SI in the same collateral or proceeds IF:
(1) the PMSI is perfected at the time (before) debtor receives possession of the collateral;
OR
(2) perfected w/in 20 days after debtor receives possession

58
Q

Priority: perfected SC v. perfected SC — conflicting PMSI’s?

A

(1) SP who has PMSI as SELLER has priority over PMSI as lender;
(2) otherwise, 1st to file or perfect wins

59
Q

Priority: perfected SC v. perfected SC — special rule for investment property:

A

The 1st to file/perfect rule generally covers conflicting interests in investment property. HOWEVER –> a SI’s perfected by CONTROL has priority over a SI perfected by other methods (regardless of when control was obtained)

60
Q

Priority: priority of proceeds?

A

A perfected SI in proceeds will have the same date of priority as the perfected interest in the original collateral (as long as perfection extends beyond 20 day temporary perfection)

61
Q

Priority: perfected SC v. buyer of collateral/transferee — general rule when buyer buys collateral?

A

A purchaser of goods generally acquires his transferor’s rights to the extent of the interest purchased. BUT in certain situations, the buyer can take the collateral free of the attached SI…

62
Q

Priority: perfected SC v. buyer of collateral/transferee — authorized sale?

A

If the sale is authorized by the SP –> buyer takes free fo the SI
- can be express or implied authorized (silence/acquiescence by SP)

63
Q

Priority: perfected SC v. buyer of collateral/transferee — unauthorized sale?

A

Depends if there was perfection or not:

(1) perfected SI’s — continue even after/if the collateral is sold (if debtor defaults, SP can get collateral back from whoever has it), EVEN IF good faith purchaser (purchased without knowledge of SI)***** (exception: BOCB)
(2) unperfected SI’s — if unperfected at time buyer buys the collateral & buyer has no knowledge of SI (ie, is a good faith purchaser), gives value, and receives possession of the collateral –> the buyer has priority/takes free of the SI

64
Q

Priority: perfected SC v. buyer of collateral/transferee — exception to general rule that perfected SI’s take priority over good faith purchaser: BOCB rule…

A

Rule: A buyer in the ordinary course of biz takes free of SI’s created by his seller (EVEN THO SI is perfected) & (EVEN THO buyer knows of its existence)
- must be sale in SELLER’s ordinary course of biz

65
Q

Priority: perfected SC v. buyer of collateral/transferee — special rule for consumer to consumer sales of consumer goods (“the garage sale rule”)

A

In cases of CG’s sold from one consumer to another consumer, the buyer takes free of a SI, even though its perfected, IF:
(1) he buys it without knowledge of SI (good faith purchaser);
(2) for value;
(3) for his own personal, family, or household use
UNLESS
prior to the purchase, the SP has filed a FS covering such goods (so, can be NO FS filed)

66
Q

Priority: perfected SC v. lien creditor/judgment lien holders — what is a “lien creditor”? when does it arise?

A

LC: a person who acquires a lien by judicial attachment, levy, or the like, OR a bankruptcy trustee

Article 9 is not clear when status as LC arises, but the lien obtained by judicial proceedings must attach to the collateral (gets judgment and levies = LC)

67
Q

Priority: perfected SC v. lien creditor/judgment lien holders — general rule of priority?

A

(A) an UNPERFECTED SI is subordinate to rights of a person who becomes a LC b4 the SI is perfected (ie, LC wins)

(B) if the SI if PERFECTED *b4 person becomes LC, the SI has priority (SC wins)

KEY: look at time of perfection of SI AND at time of levy by sheriff

68
Q

Priority: perfected SC v. lien creditor/judgment lien holders — special rule: PMSI vs. LC

A

If SP files w/ respect to the PMSI w/in 20 days after debtor receives possession of collateral –> SP takes priority over the rights of a lien which arises between the rime the SI attaches and time of filing

(doesn’t matter if PMSI in inventory vs. non-inventory — any PMSI works)

69
Q

Priority: perfected SC v. lien creditor/judgment lien holders — special rule: SA + filing

A

If an UNPERFECTED SC has a (1) SA signed by D & (2) has filed before the lien attaches (BUT was unperfected b/c creditor had not yet given value) –> then SC still prevails over LC

70
Q

Priority: perfected SC v. statutory lien claimants

A

(ex - mechanics lien, LL lien)

Statutory lien claimants usually have priority over SP, even if SP is perfected, so long as complies with statutory requirements (ie, the goods/serives were provided in the ordinary course of biz & collateral remains in possession of SLC)

71
Q

Rights of SP on default?

A

As long as SI has attached (does not need to be perfected), SC is entitled to:

(1) take possession of the collateral & sell it to satisfy the debt, and then sue to collect the deficiency;
(2) for non-goods collateral (like accounts receivable), SC can obtain payment directly from person owing $ to debtor; or
(3) SC can sue on the debt itself

72
Q

Definition of “default”

A

Article 9 does not define default; rather, typically grounds for default are specified by the security agreement

73
Q

Self-Help Repossession: Rule?

A

After default, SP is entitled to take possession of the collateral (only tangible things) - without judicial process - if it can be done without breach of the peace

74
Q

3 consequences for SP when breach of the peace

A

(1) he loses authorization to repossess
(2) may be sued for conversion (and maybe assault, battery, trespass)
(3) is liable for actual (and frequently, punitive) damages

75
Q

What constitutes a “breach of the peace”?

A

Determined case-by-case;

(1) repo over protests of D = BOP
(2) risk of violence/implied threats = BOP
(3) conduct that could be deemed unreasonable under circa (unreasonable invasion of privacy)
(4) unauthorized entry into home

76
Q

If self-help is unavailable, SP can…

A

SP can always use judicial process (file replevin action) to get the goods

77
Q

General rule regarding strict foreclosure? Can debtor prevent?

A

General rule: SP may (1) give written notice (2) to the D & any competing SP’s, that it proposes to retain the collateral in full or partial satisfaction of debt

Debtor (or competing SP) can prevent this retention by giving written object to the repossessing SP within 20 days after notice was sent

78
Q

Exceptions/special rules to strict foreclosure for consumer goods

A

If the collateral is CG’s:
(1) SP cannot propose “partial satisfaction” (regardless of how much consumer/debtor has paid on the debt)
&
(2) if debtor has paid at least 60% of the debt, then SP MUST sell the goods and cannot keep them in satisfaction of the debt (unless gets debtor to affirmatively agree after default that creditor can keep in full satisfaction of debt)

79
Q

Rule regarding SP’s resale of collateral

A

After adult, SP may sell, lease, or license the collateral. Disposition may generally be by either public (auction) or private sale.

KEY - ALL aspects of the sale must be reasonable!

80
Q

General test for validity of a sale

A

Every aspect of the sale must be “commercially reasonable,” including the method, time, place, and terms of the sale

81
Q

Rule regarding reasonable notice of sale; contents?

A

Reasonably notice that is (1) authenticated by the SP (ie, no oral notice) must be (2) given to D & competing SP’s who have filed FS or notified the SP of their interest (except in case of consumer goods)

Contents: Must state:

(1) time and place of public sale;
(2) time after which private sale will be made
(3) method of sale (public or private)
(4) description of debtor/SP/collateral
(5) statement that debtor is entitled to accounting of unpaid debt and the charge for performing such accounting

82
Q

May a SP buy the collateral at the sale?

A

Generally, SP may buy the collateral at a PUBLIC sale, but may at a PRIVATE sale ONLY IF the collateral is customarily sold in a recognized market OR is of type which is subject to widely distributed standard price quotations (the price is what it is)

83
Q

Effect of resale of collateral?

A

Absent bad faith by purchaser, the purchaser of the collateral generally takes all debtor’s rights in the collateral

The sale also discharged the SI under which the sale is made AND all subordinate SI’s and liens (however, purchaser is still subject to superior SI’s)

84
Q

Order of distribution of proceeds of sale of collateral?

A

1st - expenses of repo and sale
2nd - satisfaction of the debt under which the sale is brought
3rd - satisfaction of subordinate 3rd party SI debts, in order of priority
4th - surplus, if any, goes to debtor

85
Q

SP’s right to deficiency?

A

If the collateral sold does not bring in enough to pay sale expenses and the debt, the SP may recover the deficiency from debtor (deficiency = unsecured debt)

86
Q

What happens if SP fails to comply with resale requirements/rules?

A

(1) rebuttable presumption arises that the collateral was worth enough to pay the entire debt
&
(2) SP is liable for actual damages caused by his failure to follow Article 9

87
Q

Only way debtor can prevent sale after default?

A

Debtor can exercise his right to redeem the collateral

88
Q

Debtor’s right to redeem the collateral?

A

At anytime before SP has resold the collateral or obligation has been discharged by SP retaining the collateral, D may redeem the collateral (unless agreed otherwise AFTER default) by tendering full fulfillment of ALL obligations secured by the debt

89
Q

“Fixture”

A

Personal property is a picture if it is attached to RE with the intent that it become a permanent part of the RE

90
Q

Perfection of a SI in a fixture?

A

Either UCC FS OR fixture filing is sufficient, BUT fixture filing = added benefits re priority…

Fixture filing = in the office where a mortgage on the RE would be filed

91
Q

Priority: SP vs. SUBSEQUENT real estate interest?

A

A perfected SI in fixtures has priority over any RE interest that arises SUBSEQUENT to the perfection of the SI by fixture filing

92
Q

Priority: SP vs. PRIOR real estate interest? Exception? Exception to Exception?

A

General rule: a prior RE interest that is properly recorded has priority over a SI that subsequently arises

EXCEPTION for PMSI: a PMSI in fixtures takes priority over an earlier RE interest IF: (1) it is perfected by fixture filing (2) b4 the goods become fixtures OR within 20 days thereafter

E2E: a construction mortgage takes priority over a subsequent PMSI in fixtures, even if the SI is perfected by FF within 20 days

93
Q

Temporary perfection for relocation of debtor?

A

If perfection is governed by the law where D is located and debtor moves to new state, the SI will remain temporarily perfected w/o further action by the SP until 4 months after D moves or until perfection in 1st state lapses, whichever is first
— this also applies to collateral D acquires within 4 month window

94
Q

Temporary perfection for collateral transferred to a new D in a different state?

A

SI remains perfected for 1 yr after sale of collateral OR until perfection lapses in first state, whichever is earlier

95
Q

Temporary perfection for SI in collateral a new D acquires?

A

A SI in collateral a new D acquires b4 or within 4 months after becoming bound by original debtors SA will be temporarily perfected for 4 months by a corresponding FS in the original debtor’s jxtion

96
Q

Perfection of possessory SI in collateral that moves states?

A

If a SI is a possessory SI and the collateral is moved to a new state, the SI will remain perfected as long as the SI is also perfected by possession under the laws of the new state