Flashcards in Secured Transactions Deck (87)
Secured Transactions - Source of Law?
UCC Article 9
What is the scope of Article 9?
Applies to consensual security interests in personalty and fixtures.
How does a creditor attach under Art 9?
To attach you need:
Rights in the collateral
Once attached, how does the creditor attain PERFECTION?
PERFECTION = PUBLICITY
By putting the world on RECORD NOTICE of its existence.
When more than one creditor has a stake in the same collateral, what are the rules of PRIORITY?
First in time = first in right.
The first to perfect takes first, generally.
What if the debtor DEFAULTS on the debt or obligation?
The Art 9 creditor has statutory and judicial remedies
What is personalty under Art 9?
Does Art. 9 apply to statutory or mechanic's liens?
No. Art. 9 applies only to consensual liens.
Tangible Collateral Test
Subjective - collateral's primary use in the hands of the debtor (subjective).
Tangible Collateral Types
1. Consumer goods
4. Farm products
Intangible Collateral Types
6. Mutual funds
7. Proceeds from the sale of collateral
9. Promissory notes
Three Requirements for Attachment
Value must be given by creditor
Contract must evidence the secured transaction
Rights in the collateral - debtor must have rights in the collateral
When will Attachment exist without a writing/contract?
If the secured party is in POSSESSION of the collateral.
How can the RECORD/Contract be authenticated?
1. Signed/Electronically marked; and
2. Reasonably identify the collateral
Are "after-acquired collateral clauses" enforceable?
Floating lien: A lien on a set of assets that can change in quantity and scope over time (e.g. inventory).
How does the creditor perfect security interests?
By record or constructive notice through:
2. Files public record notice
What is the purpose of creditor perfection?
Protects the secured party from competing creditors.
What is a PMSI?
Purchase Money Security Interest
Enables the debtor purchase the goods and applies to CONSUMER GOODS ONLY.
Automatic attachment but still has to file within 20d of buyer taking possession.
Not just vendor - any loan specifically for purchasing the goods.
What must a creditor file for public record notice?
A "financing statement" containing:
1. Debtor's name and address
2. Creditor's name and address
3. Description of the collateral (even general - "all of his assets")
Where is the "financing statement" (UCC) filed?
With the Secretary of State in the state where the:
INDIVIDUAL DEBTOR has principal residence.
CORPORATIOND DEBTOR is organized.
(EXC - land based collateral)
Exception to central filing of financing statement
If the collateral is timber, minerals, or fixtures then it is filed locally in the county where the land is located.
(Not with SoS)
What is an AUPie?
Attached Unperfected Creditor
What is a lien creditor ("LC")?
A general unsecured creditor who goes to court to get a judicial lien on collateral
What is a Perfect Attached Creditor ("PAC")?
Art 9 creditor who succeeds in attaining perfection.
What is a NOCie?
Non-Ordinary Course Buyer who purchases the collateral OUTSIDE the normal stream of commerce.
What is a BIOC?
Buyer In the Ordinary Course who purchases the collateral in the normal stream of commerce.
What is a GUC?
General Unsecured Creditor - creditor who never bothered to take collateral
What is the order of subordination?
[BPL NAGs me in Rivlin]