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Bar II > Secured Transactions > Flashcards

Secured Transactions Flashcards

1
Q

perfect sp v. perfect sp

A

FTFOP

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2
Q

perfect sp v. unperfected sp

A

perfected

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3
Q

unperfected sp v. unperfected sp

A

first to attach

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4
Q

sp v. judicial lien

A

whichever arose first - perfection or lien

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5
Q

sp v. buyer

A

buyer buys with interest attached unless exception applies

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6
Q

types of tangibles

A

consumer goods
equipment
farm products
inventory
accessions
commingled

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7
Q

types of intangibles

A

chattel paper
investment property (stocks)
accounts receivable
deposit accounts

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8
Q

secured interst in fixtures v. real property interest

A

SI in fixtures has priority if filed before real property interest is recorded

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9
Q

perfected SI in fixtures v. judicial lien

A

perfected SI wins

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10
Q

PMSI in fixtures v. prior real property interst

A

PMSI wins if filed before goods became fixtures or within 20 days

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11
Q

SI in fixtures v. prior construction mortgage

A

construction mortgage wins if filed before goods became fixtures

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12
Q

requirements for attachment

A

-security agreement
-value given
-debtor has rights

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13
Q

security interest can cover

A
  • future advances (clause)
  • after acquired (don’t need clause for this if its inventory)
  • proceeds (automatic)
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14
Q

requirements for perfection

A

attachment and one of the five:

  1. filing
  2. certificate of title
  3. possession
  4. control
  5. automatic PMSI - consumer goods
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15
Q

required info for financing statement

A

debtor’s name
description of collateral
secured party’s name

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16
Q

majority rule for debtor’s name

A

if debtor has valid driver license where the financing statement is going to be filed, use that name exactly

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17
Q

test for if debtor’s name is ok

A

standard search finds it

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18
Q

how to maintain perfection through expiration

A

FS is good for 5 years, file new one within 6 months of end and get another 5 years

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19
Q

how to maintain perfection through name change

A

SP is still perfected for 4 months. amend within 4 months and stay perfect

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20
Q

how to maintain perfection through collateral use change

A

SP doesn’t have to do anything

21
Q

how to maintain perfection through debtor moving out of state

A

SP has until financing statement expires or 4 months to file new financing statement in new jurisdiction - whichever is sooner

22
Q

how to maintain perfection through collateral moving out of state to new debtor

A

creditor has one year to file financing statement in new jurisdiction

23
Q

how to maintain perfection in proceeds

A

AUTOMATIC for 20 days

then, must amend FS unless
- identifiable cash proceeds
- same office rule

or, just perfect again

24
Q

when does same office rule apply

A

SI was perfected by filing FS and
new FS would be filed in same office and
proceeds were not purchased with cash

25
choice of law for perfection
debtor is individual: file where debtor is located debtor is registered org: file where organized debtor is unregistered org with one place of business: file at place of business with multiple places of business: file at CEO
26
special PMSI rule for SP v. lien creditor
if sp files on a psi within 20 days of debtor getting possession of the collateral, SP still takes priority over LC who shows up between time of attachment and SP filing
27
sp v. lc rule for future advances
future advance by SP will take priority over LC if -made without knowledge of lien - within 45 days of lien arising - pursuant to commitment entered into without knowledge of the lien
28
PMSI super priority rule for goods other than inventory and livestock
PMSI in goods other than inventory or livestock has priority over conflicting security interest in same goods or proceeds IF PMSI is perfected at time debtor receives possession of the collateral or within 20 days after
29
PSMI super priority rule for inventory
PMSI in inventory has to be perfected at time debtor gets possession of inventory creditor must send authenticated notice to holders of previously filed security interests in the inventory if both are met, have super priority
30
if no perfection, buyer takes free if buyer
1. gives value and receives delivery 2. without knowledge of the SI and 3. before SI is perfected
31
does buyer take free if SP had incorrect info on FS
yes if buyer reasonably relied on it
32
general rule for buying
if you buy with a security interest on it, you take it home with security interest on it
33
exceptions to general rule about buying and taking the security interest
authorized sale exception unauthorized sale exception - BIOCOB
34
rule for BIOCOB
BIOCOB takes free of security interest created by his seller even though 1. buyer knows SI is perfected and 2. buyer knows off its existence if buyer's seller was a BIOCOB, then buyer is protected via shelter rule
35
definition of BIOCOB
- buys in good faith - without knowledge that the sale violates rights of SP - buys in ordinary course from someone who works in that biz
36
garage sale rule
buyer will take free of perfected SI if buyer - buys without knowledge of SI - buys for value and - buys for own personal family household purpose SP can defeat this by simply filing a FS
37
options for repossession
- self help - judicial action -foreclosure
38
what can SP not do for self help
no breach of peace - no violence or potential for violence presence of debtor + verbal objection = breach simple trespass is ok - night is right commercial premise less likely to be problem
39
standard for foreclosure sales
commercial reasonableness sold in manner something of that kind would normally be sold in
40
notice requirement for foreclosure sale
must provide notice to debtor and any other interested parties at least 10 days before consumer goods - must send notice as to any deficiency or surplus of sale
41
exceptions to notice requirement for foreclosure sale
collateral is perishable/ threatens to decline rapidly collateral is of type customarily sold on recognized market person has waived rights
42
when can SP buy collateral himself
public sale - ok private sale - if collateral is a type customarily sold in recognized market or is type where there are widely distributed price quotations
43
effect of sale on security interest
rids collateral of foreclosing SP's interest and any subordinate any superior interests survive
44
hierarchy of where foreclosure money goes
expenses of repo and sale foreclosing SP's debt subordinate SP's debts in order of priority surplus to debtor
45
requirements for strict foreclosure
SP c an keep property to fully or partially satisfy debt if 1. debtor consents by agreeing or failure to make written objection within 20 days 1. SP sends written notice of intent to keep collateral 3. none of the notified parties object within 20 days exception: no partial strict foreclosure in consumer transactions exception: 60% rule
46
what is the consumer goods 60% rule
if debtor has paid at least 60% of cash price for a PMSI or for the loan, SP must sell the collateral within 90 days after repo (can't keep it) unless debtor waives right after default
47
SP's liability for failure to comply with repo rules
1. actual damages 2. consumer goods - at least 10% of cash price + amount equal to all interest charges to be paid over life of loan 3. possible loss of deficiency judgement
48

Bar II (16 decks)

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