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Secured Trans (Step 2: Determine whether trans is w/in Scope of Art 9 (9…
Secured Trans
Step 2
: Determine whether trans is w/in Scope of Art 9
9-109(a): Basic scope provision. (c) and (d):
exclusions
from coverage
Substance over form
1-203: True lease? or disguised SI
True bailments not covered by Art 9
Sureties
majority view is that sureties have a priority claim under the doctrine of equitable subrogation and do not have to comply with Art. 9. An assignment to a surety is NOT a SI.
Step 3
: Determine whether SI has been properly created and attached and is enforceable
9-203: attachment and enforceability
Definitions: SA: 9-102(a)(74). Agreement: 1-201(b)(3). Value: 1-204
9-108: sufficiency of description
SA must be AUTHENTICATED unless POSSESSION or CONTROL by SP
Value must be given (1-204) and debtor must have rights in the collateral (cmt 6 to 9-203)
Step 5
: Determine whether the SI has been perfected
9-308: attached and fulfilled all perfection reqs
9-301 & 9-303-6: Perfected in right place?
9-310(a): perfection by filing FS (general rule)
Exceptions to FS Filing Req
9-310(b) and 9-312(b) interests
9-313: Possession
9-314: Control
9-311(a): Specific statutes
9-315: Proceeds
9-309(1): Perfection upon attachment
9-302 lists exceptions to filing
Step 1
: Understand terminology
1-201: general terminology
9-102: most ST terms
Step 4
: Check contents of the SA and FS to determine what's covered
Financing Statement
9-315(d): proceeds
9-308(d): supporting obligations
9-502 & 9-516: formal FS requirements
9-309: SIs perfected upon attachment (no FS necessary)
Security Agreement
9-108: sufficiency of description
9-203(f): right to proceeds and supporting obligations
9-204(a) & (b): after-acquired collateral. (c): Future advances
Step 6
: Determine the rights of the SP against competing 3rd party interests.
If SI is UNperfected
9-201(a):
General Rule: “Except as otherwise provided in [the Uniform Commercial Code], a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors.”
Exceptions
9-322: perfected SPs
9-317: Lien Creditors
Bankruptcy Trustee: 11 USC 544, 547
If SI is perfected
9-201(a)
: General Rule
Narrow Exceptions
9-322(a): FIRST TO FILE/PERFECT
9-322(f), 9-324-39: Any special priority rules apply?
Has collateral changed form?
Has the collateral been sold, leased, licensed, exchanged, collected or otherwise disposed of— Rev. §§9-102(a)(64), 9-315 on proceeds and Rev. §9-322(c) on priority of a proceeds claim
Has the collateral become so related to particular real estate that an interest in it arises under real estate law—Rev. §§9-334, 9-604 on fixtures
Has the collateral been installed in or affixed to other goods—Rev. §9-335 on accessions
Has the collateral become part of a product or mass—Rev. §9-336 on commingled or processed goods
Step 7
: Determine the rights of the SP against the debtor in the event of default.
Has there been default? Look to SA and then review Part 6 of Art. 9
9-207: Duties of SP in possession
9-401-9, 9-340: Rights and duties of third persons