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Secured Transactions, Default - Coggle Diagram

- - - - SI > unsecured
      - Judicial lien creditor
        
        Statutory or CL creditor (has a lien)
        
        Possessory lien that secures payment for goods or services furnished in the ordinary course of business (e.g., mechanic’s lien) > any security interest
        
        Perf. SI >Judicial lien > unperfected
        
        Exceptions
        
        Unperf may have priority if it only needs to give value
        
        If PMSI perfects in 20 days
        
        A security interest is subordinate to a lien creditor if the advance is made 45+ days after the lien arises, unless made or committed to without knowledge of the lien.
  - - - Transferee (NB) v. SP with SI
        
        SI continues
        
        Buyer versus unperf. SI
        
        Free from SI if
        
        delivery
        
        no knowledge of SI
        
        Value
        
        Buyer v. Perfected SI
        
        subject to SI
    - - BCOB
        
        Consumer buyer
        
        Purchase of chattel paper
        
        Future advances
        
        Transferee of $
        
        Article 2
        
        1 more item...
        
        From bank deposit accnt
        
        takes free of SI
        
        Takes free
        
        (1) after SP acquires knowledge of purchase (2) 45 days after the purchase, whichever earlier
        
        new value, poss./control, gf, in OCOB, does not indicate assignment
        
        priority over SI
        
        Value, personal use, from consumer seller w/o knowledge
        
        Free of SI unless filed (garage sale rule)
        
        GOODs, in GF, w/o knowledge of violating rights, OCB from seller in goods of that kind
        
        Free of SI
  - - - First to file or protect
      - Perf. v. Unperf.
        
        Perf > unperf.
        
        Unperf. v. Unperf.
        
        First to attach
  - - - PMSI > non PMSI
    - - PMSI in inventory/livestock v. any SI
        
        Perf. PMSI v. Perf. PMSI
        
        Proceeds from PMSI in goods
        
        Priority generally extends to proceeds if perf. at poss. or 20 days after
        
        First to file or perfect
        
        Seller PMSI > Lender PMSI
        
        Priority if perfected by time of poss.
        
        If by filing must send notice
      - PMSI if perfected in 20 days of D's possession
  - - - first to file or perf.
    - - Gen priority rules and right to removal upon default
    - - first to file or perf.
    - - Control > non control
  - - - Perf SI in Fix v. JL
        
        PMSI in Fix v. prior RP
        
        Prior Con Mort v. SI in Fix
        
        Con Mort > if filed before goods became fixtures
        
        PMSI > if filed before became fix or 20 days afterwards
        
        FIX > JL
      - Fix> if filed by Fix filing before RP recorded
- - - - Must satisfy SoF
      - Rights and duties of SP
        
        Rights
        
        Right to use or operate the collateral to preserve the collateral or its value
        
        Right to hold proceeds received from the collateral
        
        Right to charge for reasonable expenses incurred in the custody, preservation, use, or operation of the collateral
        
        Duties
        
        Duty of reasonable care in the custody and preservation of the collateral
        
        Duty to keep the collateral identifiable
        
        Duty to relinquish possession or control of the collateral upon satisfaction of the secured obligation
        
        Risks
        
        Debtor holds the risk of loss
    - - Reasonably identifies collateral
  - - - Value to the debtor which was used to incur obligation OR
      - Sold goods to debor and debtor incurred obligations
    - - Acquired an interest in software in an integrated transaction in which the debtor also acquired an interest in goods (e.g., a computer) AND
      - Acquired that interest in the software for the principal purpose of using the software in the goods
- - - - Farm products
      - Inventory
      - Consumer goods
      - Equipment
- - - - Tangibles (goods, instruments, negotiable documents, money, tangible chattel paper, certificated security)
      - Perfected during possession
    - - Specific intangibles
        
        investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, electronic documents
      - ONLY form of perf for
        
        Letter of credit rights
        
        Deposit accounts, which require
        
        SP is bank
        
        Bank, SP, and debtor agree to control in writing
        
        SP becomes bank customer
    - - Every SI except:
        
        Deposit account, money, or letter of credit rights
        
        Objective: notice
        
        Requires
        
        SP's name
        
        Description
        
        Can be super generic
        
        Debtors name
        
        Cannot be seriously misleading
        
        If changes - 4 months to change
        
        Authorization
        
        Need not sign
        
        “ipso facto authorization” occurs when the debtor’s authentication of the SA = authorization to file FS
      - Location and Date
        
        Location
        
        RP - office for recording mortgages
        
        Everything else - SoS office
        
        For car must be on title
        
        Date
        
        Effective upon delivery and fee
        
        If refused
        
        Justified - not filed
        
        Unjustified - filed unless BFP relied on filing
        
        Effective for 5 years
        
        Continuation must be 6 months
        
        If not filed, treated as never perfected
    - - Indefinite perfection
        
        PMSI of consumer goods
      - Temporary perfection (COL changes)
        
        New value under AS
        
        For a certified sec, negotiable document, instrument
        
        Perfected 20 days from attachment
        
        If delivered for selling or exchange
        
        Temp. perfection for 20 days
        
        If debtor moves - 4 months
        
        If COL moves - 1 year grace period
      - Proceeds
        
        20 days or
        
        Indefinite for
        
        FS covers proceeds (in 20 days or is broad enough)
        
        Cash proceeds if ID
        
        Same office rule
        
        FS covers proceeds OR Filed in same office as OG COL
        
        1 more item...
- - - - The time price differential +10% cash price even if damages are less
- - - - Public
      - Private
        
        SP CANNOT PURCHASE
  - - - Secondary obligor
      - SPs and Liens perfected by filing
      - Parties who notified of claims
    - - COL is type customarily sold in recognized market
      - Waiver to right of notification
      - COL is perishable or declines speedily in value
- - - - Subordinate SIs
        
        Debtor
        
        Liable for deficiency except for
        
        Accounts, chattel paper, payment intangibles, or prom notes
        
        If demand made before distrib.
  - - - Includes warranties unless disclaimed
- - - - debtor paid 60% of cash price (PMSI) or 60% on obligation (non-PMSI)
      - SP must SELL goods, unless debtor waives after default
      - SP has poss.