Statutory Scheme Flashcards
PMSI
A PMSI arises when:
1. A seller sells goods to the debtor on credit and retains a security interest in the goods sold
- A creditor loans funds to the debtor to enable the debtor to buy specific collateral, those funds are used by the debtor to buy that specific collateral, and the creditor takes a security interest in that specific collateral
Leases
A lease is a secured transaction (not a true lease) if:
1. The lease term is equal to or greater than the remaining economic life of the goods
2. The lessee is bound to purchase the goods at the end of the lease or to renew the lease for the remaining economic life of the goods
3. At the end of the lease, the lessee has an option to purchase the goods or renew the lease for little to no consideration
Ask: is it reasonably likely that the lessor would get the goods back with meaningful economic value?
Goods
Goods are tangible, moveable personal property. Classification depends on how the debtor is using the collateral.
4 types:
Consumer goods
Equipment
Farm products
Inventory
Consumer Goods
Used or bought primarily for personal, family or household purposes.
Equipment
Used or bought for use in a business
*Also the catchall category
Farm Products
Crops, livestock, supplies, products of crops/livestock in their unmanufactured state if in possession of a debtor engaged in farming operations
Inventory
Goods held for sale or lease, and materials used or consumed in a business in a short period of time
Intangibles
Intangible collateral is classified based on its nature.
8 types:
Instruments
Documents
Chattel paper
Investment property
Accounts
Deposit accounts
Commercial tort claims
General intangibles
Instruments
Papers representing the right to be paid money (promissory notes, checks)
Documents
Papers representing the right to receive goods
Chattel Paper
Record which shows both a monetary obligation and a security interest in specific goods
Investment Property
Stocks, bonds, mutual funds
Accounts
Right to payment for goods sold or services rendered
Deposit Accounts
Bank accounts
Commercial Tort Claims
A tort claim where the claimant is an organization or is an individual but the claim arose out of business and does not include personal injury damages
General Intangibles
Any other personal property (typically IP)
If the principal obligation is monetary it’s a payment intangible
