Secured Transactions

Front 1

Definition of Secured Transaction

Back 1

Transaction that creates a security interest in personal property or fixtures includes:
(1) sale of accounts, chattel paper, payment intangibles
(2) consignment if worth more than 1k and not consumer goods
(3) Sale disguised as a lease

Front 2

Vocabulary

Back 2

(1) Attachment - steps required to give SP a SI in collateral effective as against the debtor
(2) Perfection - teps required to give SP a SI in collateral effective as against the world

Front 3

Types of Collateral

Back 3

(1) Goods (consumer, equipment, farm products, inventory)
(2) Instruments
(3) Document - evidence of possession
(4) Chattel paper - monetary obligation and SI in goods
(5) Investment property
(6) Account - right to payment for goods/services
(7) Deposit account (no consumer accounts0
(8) General intangible

Front 4

Attachment

Back 4

(1) SP gives value
(2) D has rights in collateral
(3) Authenticated SA w/ description of collateral OR possession

Front 5

Proceeds

Back 5

(1) Whatever is received from dispossision of collateral proceeds
(2) SA gives a SP a right in identifiable proceeds (proceeds last to leave rule)

Front 6

Perfection - Methods

Back 6

(1) Automatic
(A) PMSI in consumer goods
(B) Sale of payment intangible or promissory note
(C) Temporary perfection for 20 days for securities, negotiable documents, or instruments
(2) Possession
(A) Perfected as long as possessed
(B) Does nto apply to intangibles
(3) Control
(A) Available for investment property, nonconsumer deposit accounts, eletronic chattel paper
(B) SP has done steps necessary to sell account without further action from owner
(4) Financing Statement
(A) Contents: debtors name (not seriously misleading), collateral (reasonable identify), SP name
(B) File where debtor is

Front 7

Perfection - Proceeds

Back 7

(1) If collateral perfect, proceeds perfected for 20 days unless further action taken unless
(A) Identifiable cash proceeds
(B) Collateral perfected by FS and proceeds not purchased with cash

Front 8

Priority - SP vs. SP

Back 8

(1) First to file or perfect EXCEPT
(A) PMSI in goods other than inventory/livestock if perfected within 20 days after receipt
(B) PMSI in inventory/livestock if perfected within before receipt and notice to holders of previous conflicting SI
(C) PMSI of seller trumps PMSI of lender
(D) For investment property, control trumps any other method
(E) For deposit account control trumps traceable proceeds wih account in SP name's best
(F) Purchaser of chattel paper in good faith with possession trumps any other SP

Front 9

Priority - SP vs. Buyer of Collateral

Back 9

(A) Authorized sale - buyer takes free of SI
(B) Unauthorized sale - buyer in ordinary course (usually sells this stuff and in this manner) take free of SI created by seller even if perfected and buyer knows of its existance
(I) Buyer of consumer goods takes free of unfiled SI if buys for value, without knowledge, for consumer use

Front 10

Priority - SP vs. Lien Creditor

Back 10

(1) Lien creditor trumps unperfected SI
(2) SI trumps if perfected before levy of lien creditor
(3) PMSI trumps if filed perfected within 20 days

Front 11

Priority - SP v. Statutory Lien Claimant

Back 11

(1) Statutory lien trumps perfected SI

Front 12

Default - Definition

Back 12

(1) Defined in SA
(2) Failure to perform or pay the obligation when due

Front 13

Default - Self-Help Repossession

Back 13

(1) Can repossess if done without breach of peace
(2) If peace breached, not authorized to repossess, sued for conversion, and liable for actual/punitive damages

Front 14

Default - Strict Foreclosure

Back 14

(1) SP may retain collaeral in full/partial satisfaction of debt
(2) SP must notify any other perfected SP and if objected to must be disposed of by sale

Front 15

Default - Resale

Back 15

(1) Reasonable notification
(2) Timeliness (nonconsumber 10 days)
(3) Content (parties, collateral, sale method, accounting, place of sale)
(4) Commercially reasonable sale
(5) D liable for deficiency
(6) Failure to comply with requirements: consumer rebuttable presumption of no deficiency

Front 16

Fixtures

Back 16

(1) Perfection - same as normal except fixture filing required for priority over real estate interests
(2) SP has priority over subsequent interest in real estate and vice versa except construction mortgage