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Flashcards in Definitions/Classifying Deck (12)
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1

security interest

-an interest in personal prop or fixtures that secures payment or performance of an obligation

2

SA

consensual agreement that creates a security interest

3

Goods

-anything that is movable at the time that a SI attaches
-includes fixtures, timber that is to be cut, unborn animals, growing or unharvested crops, and manufactured homes
-4 classes of goods: consumer goods, farm products, inventory, equipment (Cats Gets Furry Paws Into Everything)

4

Transactions covered by art 9

-ones that create, by K, a SI in a personal property or fixture

NOT COVERED:
-leases
-some consignments
-liens
-RP transactions
-some sales of receivables

5

Leases

-not covered by art9
-disguised sale= lessee must pay consideration to the lessor and his payment obligation cannot be terminated by the lease, PLUS 1 condition:
---org term of lease was greater than or equal to the remaining economic life of the goods
---lessee is bound to renew the lease for the remaining economic life of the good for no additional consideration or nominal additional consid upon completion of lease
---lessee has option to become owner for no add'tl or minimal consid upon completion of the l

6

general terms

-SI= an interest in personal prop or fixture that secures a payment or performance of an obligation
-SA- a consensual agreement that creates a SI
-debtor= person who has an interest, other than an SI or other lien, in the collateral such as the sole owner of the collateral
-collateral= prop subject to a SI (tangible or intangible)

7

real prop transactions

-Not sub to art 9 (use state RP laws)
-if art 9 receivable is secured by real property, then it will still be sub to art 9

8

Bankruptcy Code

the trustee may avoid any transfer of property
of the debtor if can establish all of the following:
(i) the
pre-bankruptcy transfer was to or for the benefit of a creditor;
(ii) the
transfer was made on account of an antecedent debt;
(iii) the debtor was
insolvent at the time of the transfer; (iv) the transfer was made within 90
days of the filing of the bankruptcy petition; and
(v) the transfer has the
effect of increasing the amount that a transferee would receive in a Chapter 7
case.

9

Quasi-intangibles

-Documents= doc of title, which confers on the holder ownership rights in goods
-Instruments=
-----negotiable= PNs and checks
-----Non-negotiable= evidence a right of payment of a monetary obligation and are transferred in the OCOB by delivery
-Invest Prop= certified and uncert securities, such as stocks and bonds
-Chattel paper= one or more records evidencing (1) a monetary obligation AND
(2) SI in specific goods or a lease of specific goods

10

Accessions v Commingled goods

-Accessions= goods that are physically united with other goods in such a manner that the identity of the goods is not lost
-commingled= goods that are physically united with other goods in such a manner that their identity is lost in a product or mass
the fact that collateral is or becomes an accession does not destroy the SI in the particular collateral
-Commingled goods do lose their identity BUT the SI will now attach to the product or mass

11

Types of Goods

-CG: those acquired primarily for personal, family, or household purposes
-Farm Products: goods that are crops or livestock and include supplies tat are used for farming
-Inventory: goods other than farm products, that are held for a sale or a lease, are furnished under a service K, or consist of raw materials, works in progress, or materials used or consumed in business
-Equip= catch all class; goods that aren't CG, FP, or I

12

Consignments

-some may fall under Art. 9 as a PMSI in consigned inventory
-to be subj to art 9, must meet:
1) person (consignor) must deliver goods to a merchant who deals in goods of that kind for the merchant to sell
2) merchant is not generally known by its creditors to be substantially engaged in selling foods for others or is not an auctioneer
3) value of the goods delivered in each delivery must be at least $1k AND
4) goods must not be consumer goods immediately before the delivery