#24 - Relocation of Debtor or Collateral

Question 1

Location of Debtor Rule

Answer 1

General Rule: location of the debtor determines which state’s law applies 9-301(1)

2 important exceptions:

1) possessory security interests (when creditor possesses the collateral) are governed by the law of the state where the collateral is located 9-301(2)

2) For deposit accounts, the law where the bank is located applies 9-304a

Question 2

Determining Debtor’s Location

Answer 2

Individual: at principal residence 9-307b1

Registered organization (one created by filing a public organic record): in state of organization. 9-307e

Nonregistered organization with one place of business: at place of business. 9-307b2. Commonly seen with casual general partnerships.

Nonregistered organization with more than one place of business: at Chief Executive Office. 9-307b3.

Question 3

Relocation of Debtor

Answer 3

When the debtor changes location:

Secured creditor has 4 months to perfect a new security interest in the location 9-316a2

If it does not do that, deemed always unperfected against all but “lien creditors” 9-316b

Deemed unperfected against everyone after 4 month period expires 9-316h

If the location change is because there is a “new debtor” (such as by corporate merger) the secured creditor has 1 year after transfer of the collateral to perfect a new sec int 9-316a3. THE COLLATERAL MUST PHYSICALLY MOVE STATES.

Question 4

UCC Monetary Obligations: Nested Definitions

Answer 4

An instrument is an instrument if it is not chattel paper.

An account is an account if it is not an instrument or chattel paper.

A payment intangible is a payment intangible if it is not an account, instrument, or chattel paper.

If not a payment intangible, it is a general intangible.

9-102(a)(61): “Payment intangible” means a general intangible that is a monetary obligation

9-102(a)(42): “General intangible” means personal property other than accounts, chattel paper… instruments…

Question 5

Relocation of Debtor Rules in 9-316

Answer 5

9-316(a) = a sec int perfected in State A remains perfected until… 4 months after the debtor moves

9-316(b) = if the sec int becomes perfected before the end of 4 months it remains perfected thereafter
-> Deemed always unperfected against all but “lien creditors”