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11 Cards in this Set
- Front
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Scope of Article 9 Creditors Seem Interested in Pursuing a Foreclosure to Receive Cash Asap. |
Article 9 applies to Consensual Security Interests in Personalty and Fixtures. Generally: Receivables, Consignments, and Agricultural Liens. |
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Security Interest |
A security interest is an interest in property or fixtures that secures payment or performance of an obligation. |
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Financing |
Creditor gives another party (debtor) something of value in exchange for the debtor’s giving the creditor an interest (the right to keep or sell the collateral if the debtor defaults) in debtor’s personal property or fixtures (collateral). |
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A lease-purchase agreement is deemed to create a security interest rather than a lease IF |
the rental obligation is NOT TERMINABLE by the lessee AND EITHER (i) lease term is =+ than the remaining economic life of the goods (ii) the lessee is req to buy the goods at the end of the lease/or renew (iii) at lease end, lessee has the option to purchase goods/renew for no/nominal consideration |
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PMSI: Dual-status rule |
SI in NONCONSUMER goods does not lose its status as PMSI if (1) purchase money collateral (PMC) secures an obligation in later, add'l funds, (2) non purchase money collateral also secures purchase money obligation (PMO) (SI in debtor's existing property too) (3) PMO is renewed, refinanced, consolidated, or restructured. |
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Attachment - VCR |
Attachment is the creation of an enforceable security interest. Attachment has three requirements, plus coexistence. There must be value given by the secured party; a preexisting debt is sufficient. There must be an agreement (security agreement) that security interests attach. Finally, the debtor must have rights in collateral. |
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Security Agreement proven by being Actually Put in Charge |
Authentication: record signed by debtor that scribes the collateral Possession: by creditor Control: by creditor in semi-intangibles (deposit account, electronic chattel paper, or investments [stocks, bonds]. |
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(5) Methods of Perfection: (3) come From being actually Put in Charge (2) Are Targeted to lazy Perfections |
1. Filing the authenticated record (financing statement) 2. Possession 3. Control 4. Automatic (PMSI in consumer goods) 5. Temporary (20 days from debtor's goods) and is continued if (i) "same office" rule (ii) identifiable cash proceeds (iii) SI perfected within 20-day period. |
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RANKING ORDER 1-6 |
1. BIOC--buyer in ordinary court (no knowledge sale is in violation) 2. PAC--perfected, attached creditor 3. LC--lien creditor 4. NOCie--non-ordinary course buyer 5. AUPie--attached, unperfected creditor 6. GUC-- general unsecured creditor |
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Basic Rule: PAC defeats all except 3 |
1. PAC who files first 2. certain PMSI holders (when AACF) (after-acquired collateral financier) a. Equipment: later PMSI file within 2 days after AACF takes possession b. Inventory: later PMSI holder must (i) file BEFORE AACF takes possession and (ii) NOTIFY before AACF takes possession 3. BIOC takes free of a perfected security interest in seller's inventory (Nordstrom shopper) |
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Secured Party's Rights on Default (5) 1.SH-R 2. JA-R 3. SF 4. S 5. ADJ |
1. self-help repo 2. judicial action repo 3. strict foreclosure 4. sale 5. action for deficiency judgment |
