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Flashcards in Secured Transactions Deck (87)
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1

Secured Transactions - Source of Law?

UCC Article 9

2

What is the scope of Article 9?

Applies to consensual security interests in personalty and fixtures.

3

How does a creditor attach under Art 9?

To attach you need:
Value
Contract
Rights in the collateral
[VCR]

4

Once attached, how does the creditor attain PERFECTION?

PERFECTION = PUBLICITY
By putting the world on RECORD NOTICE of its existence.

5

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.

6

What if the debtor DEFAULTS on the debt or obligation?

The Art 9 creditor has statutory and judicial remedies

7

What is personalty under Art 9?

Goods.

8

Does Art. 9 apply to statutory or mechanic's liens?

No. Art. 9 applies only to consensual liens.

9

Collateral Classifications

1. Tangible
2. Intangible

10

Tangible Collateral Test

Subjective - collateral's primary use in the hands of the debtor (subjective).

11

Tangible Collateral Types

1. Consumer goods
2. Equipment
3. Inventory
4. Farm products
5. Fixtures

12

Intangible Collateral Types

1. Patents
2. Trademarks
3. Copyrights
4. Stocks
5. Bonds
6. Mutual funds
7. Proceeds from the sale of collateral
8. Accounts
9. Promissory notes
10. Drafts

13

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
[VCR]

14

When will Attachment exist without a writing/contract?

If the secured party is in POSSESSION of the collateral.

15

How can the RECORD/Contract be authenticated?

1. Signed/Electronically marked; and
2. Reasonably identify the collateral

16

Are "after-acquired collateral clauses" enforceable?

Yes.
Floating lien: A lien on a set of assets that can change in quantity and scope over time (e.g. inventory).

17

How does the creditor perfect security interests?

By record or constructive notice through:
1. Possession
2. Files public record notice

18

What is the purpose of creditor perfection?

Protects the secured party from competing creditors.

19

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.

20

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")

21

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)

22

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)

23

What is an AUPie?

Attached Unperfected Creditor

24

What is a lien creditor ("LC")?

A general unsecured creditor who goes to court to get a judicial lien on collateral

25

What is a Perfect Attached Creditor ("PAC")?

Art 9 creditor who succeeds in attaining perfection.

26

What is a NOCie?

Non-Ordinary Course Buyer who purchases the collateral OUTSIDE the normal stream of commerce.

27

What is a BIOC?

Buyer In the Ordinary Course who purchases the collateral in the normal stream of commerce.

28

What is a GUC?

General Unsecured Creditor - creditor who never bothered to take collateral

29

What is the order of subordination?
[BPL NAGs me in Rivlin]

1. BIOC
2. PAC
3. LC
4. NOCie
5. AUPie
6. GUC

30

Can a PAC perfect by filing EARLY?

Yes, beginning during negotiations and gets the benefit of the early filing date.