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Secured Transactions
University of Kansas School of Law
Ware, Stephen J.

ATTTACHMENT
§9-201 General Effectiveness of SA
§9-203 Attachment of SI; Proceeds
§9-204 After Acquired Property
RIGHTS
§9-207 Rights & Duties of SP having Possession
PERFECTION
§9-301 Law Governing Priority of SI
§9-202 Law Governing Priority of SI in COT
§9-304 “ “ “ Deposit Acct
§9-307 Location of D
§9-309 SI perfected upon Attachment
§9-310 When Filing Req. to Perfect SI
§9-311 When Filing Req. to Perfect SI in COT
§9-312 Perfection of SI in Dep. Accts, Money
§9-313 Perfection by Possession
§9-314 Perfection by Control
§9-316 Perfecting SI following Change in Jrd
PRIORITY
§9-317 Interest that take Priority over SI
§9-320 Buyer of Goods (ordinary course of business)
§9-322 Priority Among Conflicting SI
§9-323 Future Advances
§9-324 Priority of PMSI
§9-332 Transfer of Money from Dep. Acct
§9-334 Priority SI in Fixtures
§9-335 Accessions
§9-335 Commingled Goods
§9-337 Priority of SI in COT Goods
RIGHTS OF 3rd PARTIES
§9-401 Alienability of D’s Right
FILING
§9-501 Filing Office
§9-502 Contents of FS
§9-503 Name of D and SP
§9-504 Indication of Collateral
§9-506 Effect of Errors
§9-507 Change of Name – duty of SP
§9-515 Duration of Effectiveness of FS
DUTIES OF FILING OFFICE
§9-520 Accepting & Refusal to Accept FS
DEFAULT – ENFORCEMENT OF SI
§9-601 Rights after Default
§9-602 Waiver of Rights
§9-607 collection and Enforcement by SP
§9-609 SP right to “Self-Help”
§9-610 Disposition of Collateral after Default
§9-611 Notification Before Disposition
§9-612 Timeliness of Notice
§9-613 Contents of Notice
§9-615 Where Proceeds Go after Disposition
§9-620 SP Keeping Collateral
§9-623 Right to Redeem Collateral
§9-624 Waiver
§9-625 D’s Remedies fo SP Failure to Comply
§9-626 Deficiency and Surplus from Disposition
§9-627 “Commercially Reasonable”

GOODS
Definition: §9-102(a)(44)
PMSI §9-103
Jrd Determining Perfection §9-301(3)
Perfection w/ Filing §9-310
Perfection by Possession §9-313
Commingled Proceeds §9-615(b)(1)
Future Advances §9-323
Priority of PMSI §9-324
SI in Commingled Goods §9-336
CONSUMER GOODS
After-Acquired Property §9-204(b)(1)
Possession §9-207(b)(4)(C)
Perfection by PMSI §9-309(1)
Rights of Buyer §9-320
Priority of Fixtures §9-334(e)(2)(C)
Mandatory Disposition §9-620(e)
Remedies for D §9-625(c)(2)
EQUIPMENT
Priority of SI in Fixtures §9-334(e)(2)(B)
Rendering Equip Unusable §9-609(a)(2)
FARM PRODUCTS
Law Governing Perfection §9-302
Priority of PMSI §9-324(d)
INVENTORY
PMSI in Inventory §9-103(b)(2)
Consignor’s PMSI §9-103(d)
Does’n apply to: §9-311(d)
Priority of PMSI §9-324(b)
ACCESSIONS
SI in Accessions §9-335
CERTIFICATE OF TITLE GOODS
Which Law Governs §9-303
Perfection of SI in COT §9-311(a)(2)
Possession to Perfect §9-313(b)
Change in Governing Law §9-316
Priority of COT Goods §9-337
FIXTURES
Priority §9-334
Filing Fixture Filing §9-501(a)(1)(B)
FS Requirements §9-502(b)
Duration Mtg Filing §9-515(g)
ACCOUNTS
Rights of Buyers §9-207(d)
Attachment §9-309(2)
Priority of Proceeds §9-322(c)(2)(C)
No Surplus or Deficiency §9-608(b)
CHATTEL PAPER
Definition
Rights of Buyers §9-207(d)
DEPOSIT ACCOUNTS
Definition
Control §9-104
Enforceability of SI §9-203(b)(3)(D)
Duties of Controlling Party §208(b)
Law Governing §9-304
Filing not Necessary §9-310(b)(8)
Perfection of SI §9-312
Perfection by control §9-314(a)-(b)
Priority in proceeds §9-322(d)
Priority in Acct §9-327
Bank’s Rights & Duties §9-341

I. SECURED CREDITORS
* Remember Peerless Packaging Co. – if you have the opportunity to get a SI in collateral and chose not to, you are out of luck. Unjust enrichment argument against the secured creditor is not going to work. They did what they should have, you didn’t.

I. CREATION OF A SECURITY INTEREST

§9-203 Attachment & Enforceability of Security Interest
A SI attaches to collateral when it becomes enforceable against the D. Enforceable against the D when:
(1) Value of Collateral Given, and
(2) Debtor Has Rights In Collateral; and
3(A) D has an authenticated SA that provides a description of the collateral; or
3(B) The collateral is not a certificated security and is in the possession of the secured party under §9-313; or
3(C) The collateral is a certificated security in registered for and the security certificate has been delivered to the secured party under §8-301; or
3(D) The collateral is, electronic chattel paper, investment property, letter-of-credit rights, or electronic deposit accounts documents, and the secured party has control pursuant to the D’s security agreement.

A. DESCRIPTION OF COLLATERAL:
i. Sufficient Description: §9-108 – a description of personal or real property is sufficient if it reasonably identifies what is covered. Examples of reasonable descriptions of collateral are specific listing, category, quantity, or any other method if the identity of the collateral is objectively determinable.
a. Accounts: §9-102(a)(2) – a right to pymt of a monetary obligation, whether or not earned by performance. DOES NOT INCLUDE ACCTS RECEIVABLE
b. Equipment: §9-102(a)(33) – gods other than inventory, farm products, or consumer goods
c. Consumer goods: §9-102(a)(23) – goods that are used or bought for use primarily for personal, family, or household purposes.
d. General Intangibles: §9-102(a)(42) – any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, inv. property, letter-of-credit, money, and oil , gas, or other minerals before extraction. The term includes pymt intangibles and software.
ii. Insufficient Description: §9-108(c) – descriptions such as “all the D’s assets” or “all the D’s personal property” are examples of insufficient description.

B. VALUE
i. Defined: §1-201(a)(42) – Very broadly interpreted to include any consideration sufficient to support a simple K. Even where a D has an existing loan and 6 months into it, in return for nothing from the C, the D extends additional SI in collateral to the C.

C. ALLOWED COLLATERAL
i. Excluded: §9-109(d)(8) & (11) –
(a) Insurance: §9-109(d)(8)
(b) Real estate (§9-109(11)
I. Exceptions: fixtures, fixture filings, liens on real prop. covered in §9-203
(c) Assignment of a claim for wages, salary, or other compensation of an employee (§9-109(d)(3)) — except for business – can assigne after-acquired accounts, chattel paper, money, and bank accounts.
(d) Pension Ri

sed w/i 10 days after secured party gives value)
(2) or commercial tort claims.
b. Consumer goods: §9-102(a)(23) – goods that are used or bought for use primarily for personal, family, or household purposes.
• Other than an accession when given as additional security, unless the D acquires rights in them w/i 10 days after the secured party gives value,
ii. Case Law: typically applies to inventory or items that there is a large amount of turn-over (i.e. if you took a SI in it at beginning of month, you wouldn’t have SI in anything at the end of month). So, w/o an explicit after-acquired property clause, the courts will not grant unless it is of that type of collateral

F. Future Advances:
i. Generally: §9-204(c) – future obligation will come in to existence as the result of an additional extension of credit by the secured creditor
ii. Priority Date: §9-323 – Perfection of the SI dates from the time an advance is made. Will be senior to Lien Creditors if:
(1) Advance made more than 45 days after the person becomes a lien creditor
(2) The C did not know about the lien; or
(3) Was made pursuant to a commitment entered into w/o knowledge of the lien.

II. PERFECTION OF SECURITY INTEREST

1. PERFECTION:
• A series of steps that the holder of a lien must take to give public notice and thereby establish priority. (“doing what it takes to get priority”)
A. Priority: §9-317(a) – a SI is subordinate to the rights of:
(1) a person entitled to priority under §9-322 (rank according to time of filing or perfection); and
(2) a person that becomes a lien C before the:
(A) the SI is perfected; or
(B) a FS covering the collateral is filed
B. Perfection: §9-308(a) – a SI is perfect if it has attached and all of the applicable requirements for perfection have been satisfied.
2. WAYS OF PERFECTING
A. Filing notice in a public records system.
a. Filing Statement must include: §9-502(a)
i. Name of Debtor
ii. Name of the Secured Creditor
iii. An indication of the collateral covered
b. Two-Step Process
1. What type of collateral is involved?
i. Accounts: §9-102(a)(2) – doesn’t have to be in writing
ii. Instrument: §9-102(a)(47) – is similar to account, but is a writing and is of a type that in ordinary course of business is transferred by delivery w/ any necessary endorsement or assignment
2. How do we perfect w/ this type of collateral

Type of Collateral

Get it

Perfect It

Goods

Sec. K

SOS