Secured Transactions Assignment 32 - PowerPoint PPT Presentation

1 / 100
About This Presentation
Title:

Secured Transactions Assignment 32

Description:

Centurion discovers that 1stBank filed earlier against FA. ... Centurion filed, SA, and lent even earlier to PU. ... So Centurion proposes FA sell the ... – PowerPoint PPT presentation

Number of Views:98
Avg rating:3.0/5.0
Slides: 101
Provided by: lopu7
Category:

less

Transcript and Presenter's Notes

Title: Secured Transactions Assignment 32


1
Secured TransactionsAssignment 32
  • Secured Creditors against Secured Creditors

2
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection.

3
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

4
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

5
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

6
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

7
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

8
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

9
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

10
Priority Rule SI versus SI
9-322(a)(1). Conflicting perfected security
interests . . . rank according to priority in
time of filing or perfection. Priority dates
from the earlier of the time a filing . . . is
first made or the security interest . . . is
first perfected.

First
11
Priority Rule PMSI versus Lien Creditor,
9-317(e)
20 day grace
Delivery
Filing
PMSI
Lien creditor
9-317(e). If a person files a financing
statement with respect to a purchase-money
security interest before or within 20 days after
the debtor receives delivery
12
Priority Rule PMSI versus Lien Creditor,
9-317(e)
20 day grace
Delivery
Filing
Attachment
PMSI
Lien creditor
Lien creditor
9-317(e). If a person files a financing
statement with respect to a purchase-money
security interest before or within 20 days after
the debtor receives delivery . . . the security
interest takes priority over the rights of a . .
. lien creditor which arise between the time the
security interest attaches and the time of filing.
13
Priority Rule PMSI versusSecurity Interest,
9-324(a)
20 day grace
Possession
Filing
PMSI
SI
9-324(a). A perfected purchase-money security
interest in goods . . . has priority over a
conflicting security interest in the same goods .
. . if the purchase money security interest is
perfected when the debtor receives possession of
the collateral or within 20 days thereafter.
14
Priority Rule PMSI versusSecurity Interest,
9-324(a)
20 day grace
Possession
Filing
PMSI
SI
Filing
9-324(a). A perfected purchase-money security
interest in goods . . . has priority over a
conflicting security interest in the same goods .
. . if the purchase money security interest is
perfected when the debtor receives possession of
the collateral or within 20 days thereafter.
15
Possession
Filing
20 day grace
PMSI
SI
9-324(a). A perfected purchase-money security
interest in goods . . . has priority over a
conflicting security interest in the same goods .
. . if the purchase money security interest is
perfected when the debtor receives possession . .
. or within 20 days thereafter.
20 day grace
Delivery
Filing
PMSI
Lien creditor
9-317(e). If a person files a financing
statement with respect to a purchase-money
security interest before or within 20 days after
the debtor receives delivery . . . the security
interest takes priority over the rights of a . .
. lien creditor which arise between the time the
security interest attaches and the time of filing.
16
Possession
Filing
20 day grace
PMSI
SI
9-324(a). A perfected purchase-money security
interest in goods . . . has priority over a
conflicting security interest in the same goods .
. . if the purchase money security interest is
perfected when the debtor receives possession . .
. or within 20 days thereafter.
20 day grace
Delivery
Filing
PMSI
Lien creditor
9-317(e). If a person files a financing
statement with respect to a purchase-money
security interest before or within 20 days after
the debtor receives delivery . . . the security
interest takes priority over the rights of a . .
. lien creditor which arise between the time the
security interest attaches and the time of filing.
17
Possession
Filing
20 day grace
PMSI
SI
Filing
9-324(a). A perfected purchase-money security
interest in goods . . . has priority over a
conflicting security interest in the same goods .
. . if the purchase money security interest is
perfected when the debtor receives possession . .
. or within 20 days thereafter.
20 day grace
Delivery
Filing
Attachment
PMSI
Lien creditor
Levy
9-317(e). If a person files a financing
statement with respect to a purchase-money
security interest before or within 20 days after
the debtor receives delivery . . . the security
interest takes priority over the rights of a . .
. lien creditor which arise between the time the
security interest attaches and the time of filing.
18
Possession
Filing
20 day grace
PMSI
SI
Filing
9-324(a). A perfected purchase-money security
interest in goods . . . has priority over a
conflicting security interest in the same goods .
. . if the purchase money security interest is
perfected when the debtor receives possession . .
. or within 20 days thereafter.
20 day grace
Delivery
Filing
Attachment
PMSI
Lien creditor
Levy
9-317(e). If a person files a financing
statement with respect to a purchase-money
security interest before or within 20 days after
the debtor receives delivery . . . the security
interest takes priority over the rights of a . .
. lien creditor which arise between the time the
security interest attaches and the time of filing.
19
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
SA and FS 2008 covers Anothers equipment
Another
20
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
Secured 1
SA and FS 2008 covers Anothers equipment
SA and FS 2006 covers Debtors equipment
Another
Debtor
21
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
Secured 1
SA and FS 2008 covers Anothers equipment
SA and FS 2006 covers Debtors equipment
Another
Debtor
Sale (unauthorized)
22
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
Secured 1
SA and FS 2008 covers Anothers equipment
SA and FS 2006 covers Debtors equipment
Another
Debtor
Sale (unauthorized)
23
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
Secured 1
SA and FS 2008 covers Anothers equipment
SA and FS 2006 covers Debtors equipment
Another
Debtor
Sale (unauthorized)
9-322(a)(1). Priority dates from the earlier of
the time a filing covering the collateral is
first made or the security interest . . . is
first perfected . . .
24
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
Secured 1
SA and FS 2008 covers Anothers equipment
SA and FS 2006 covers Debtors equipment
Another
Debtor
Sale (unauthorized)
9-322(a)(1). Priority dates from the earlier of
the time a filing covering the collateral is
first made or the security interest . . . is
first perfected . . . Secured 1 appears to win!
25
Priority Rule Transferor SI versus Transferee
SI, 9-325(a)

Secured 2
Secured 1
SA and FS 2008 covers Anothers equipment
SA and FS 2006 covers Debtors equipment
Another
Debtor
Sale (unauthorized)
  • 9-325(a). Notwithstanding 9-322(a) a
    security interest created by a debtor is
    subordinate to a security interest in the same
    collateral created by another person if
  • The debtor acquired the collateral subject to the
    security interest created by the other person
  • The security interest created by the other person
    was perfected when the debtor acquired the
    collateral . . .

26
Problem 32.1, page 524
Bank1 files
Aug 1
27
Problem 32.1, page 524
Bank1 files
Bank2 files SA, lends
Aug 1
Aug 5
28
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Aug 1
Aug 5
Aug 7
29
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
30
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins?
31
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected. 9-322(a)(1).
32
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
33
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
Bank2, perfected before C-Dogs levied.
9-317(a)(2).
34
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
Bank2, perfected before C-Dogs levied.
9-317(a)(2). C-Dogs versus Bank1. Who wins?
35
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
Bank2, perfected before C-Dogs levied.
9-317(a)(2). C-Dogs versus Bank1. Who wins?
C-Dogs, levied before Bank 1 perfected or filed
and complied with 9-203(b)(3). Who is first?
36
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
Bank2, perfected before C-Dogs levied.
9-317(a)(2). C-Dogs versus Bank1. Who wins?
C-Dogs, levied before Bank 1 perfected or filed
and complied with 9-203(b)(3). Who is first?
37
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
Bank2, perfected before C-Dogs levied.
9-317(a)(2). C-Dogs versus Bank1. Who wins?
C-Dogs, levied before Bank 1 perfected or filed
and complied with 9-203(b)(3). Who is first?
Circularity of liens.
38
Problem 32.1, page 524
C-Dogs Levies
Bank1 files
Bank2 files SA, lends
Bank1 SA, lends
Aug 1
Aug 5
Aug 7
Aug 10
Bank1 versus Bank2. Who wins? Bank1, filed
before Bank2 filed or perfected.
9-322(a)(1). Bank2 versus C-Dogs. Who wins?
Bank2, perfected before C-Dogs levied.
9-317(a)(2). C-Dogs versus Bank1. Who wins?
C-Dogs, levied before Bank 1 perfected or filed
and complied with 9-203(b)(3). Who is first?
Circularity of liens. Key Bank1 has two
priority dates
39
Problem 32.2, page 525
Centurion lends to Pilots, perfects
Mar 21
Centurion lends to Pilots, perfects in flight
simulation equipment, including after acquired
40
Problem 32.2, page 525
FirstBank lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Mar 21
Centurion lends to Pilots, perfects in flight
simulation equipment, including after
acquired Firstbank lends to Flight, perfects in
flight simulation equipment, including after
acquired
41
Problem 32.2, page 525
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Mar 21
Centurion lends to Pilots, perfects in flight
simulation equipment, including after
acquired Firstbank lends to Flight, perfects in
flight simulation equipment, including after
acquired Centurion lends to Flight, perfects in
flight simulation equipment, including after
acquired
42
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
Centurion lends to Pilots, perfects in flight
simulation equipment, including after
acquired Firstbank lends to Flight, perfects in
flight simulation equipment, including after
acquired Centurion lends to Flight, perfects in
flight simulation equipment, including after
acquired Flight sells MD-80 flight simulation
equipment to Centurion
43
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
Centurion lends to Pilots, perfects in flight
simulation equipment, including after
acquired Firstbank lends to Flight, perfects in
flight simulation equipment, including after
acquired Centurion lends to Flight, perfects in
flight simulation equipment, including after
acquired Flight sells MD-80 flight simulation
equipment to Centurion a. Who is first in the
MD-80 flight simulation equipment?

44
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
Centurion lends to Pilots, perfects in flight
simulation equipment, including after
acquired Firstbank lends to Flight, perfects in
flight simulation equipment, including after
acquired Centurion lends to Flight, perfects in
flight simulation equipment, including after
acquired Flight sells MD-80 flight simulation
equipment to Centurion a. Who is first in the
MD-80 flight simulation equipment? Firstbank,
9-325
45
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the simulator.
46
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account?
47
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes, 9-203(b)
48
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
49
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2).
50
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2). Does FirstBank have a
security interest in the account?
51
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2). Does FirstBank have a
security interest in the account? Yes,
9-102(a)(64).
52
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2). Does FirstBank have a
security interest in the account? Yes,
9-102(a)(64). Is Firstbank perfected in the
account?
53
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2). Does FirstBank have a
security interest in the account? Yes,
9-102(a)(64). Is Firstbank perfected in the
account? Yes, 9-315(c) and (d)(2)
54
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2). Does FirstBank have a
security interest in the account? Yes,
9-102(a)(64). Is Firstbank perfected in the
account? Yes, 9-315(c) and (d)(2) Whos first?
55
Problem 32.2, page 525
Flight sells MD-80 to Pilots
FirstBank lends to Flight, perfects
Centurion lends to Flight, perfects
Centurion lends to Pilots, perfects
Jul 21
Aug 21
Nov 4
Mar 21
b. Pilots paid Flight 750k for the
simulator. Does Centurion have a security
interest in the Centurion account? Yes,
9-203(b) Is Centurion perfected in the account?
Yes, 9-315(c), (d)(2). Does FirstBank have a
security interest in the account? Yes,
9-102(a)(64). Is Firstbank perfected in the
account? Yes, 9-315(c) and (d)(2) Whos first?
9-104(a)(1), Centurion has control, Firstbank
doesnt. Centurion has priority, 9-327.
56
Problem 32.3, page 525
ONB lends on computer
A year ago ONB perfects in the computer and any
substitutions, replacements or accessions. No
provisions regarding future advances.
57
Problem 32.3, page 525
ONB lends on computer
ONB files against equipment
A year ago ONB perfects in the computer and any
substitutions, replacements or accessions. No
provisions regarding future advances. Financing
statement describes collateral as equipment.
58
Problem 32.3, page 525
ONB lends on computer
ONB lends on dry cleaning equipment
ONB files against equipment
A year ago ONB perfects in the computer and any
substitutions, replacements or accessions. No
provisions regarding future advances. Financing
statement describes collateral as
equipment. Now ONB lends against dry cleaning
equipment.
59
Problem 32.3, page 525
ONB lends on computer
ONB lends on dry cleaning equipment
ONB files against equipment
A year ago ONB perfects in the computer and any
substitutions, replacements or accessions. No
provisions regarding future advances. Financing
statement describes collateral as
equipment. Now ONB lends against dry cleaning
equipment. Is a new financing statement
necessary?
60
Problem 32.3, page 525
ONB lends on computer
ONB lends on dry cleaning equipment
ONB files against equipment
A year ago ONB perfects in the computer and any
substitutions, replacements or accessions. No
provisions regarding future advances. Financing
statement describes collateral as
equipment. Now ONB lends against dry cleaning
equipment. Is a new financing statement
necessary? No. The new security interest will
have priority as of the old financing statement.
Equipment describes the dry cleaning equipment.
61
Problem 32.4, page 525
a. Carol loans 1K secured.
1K
62
Problem 32.4, page 525
a. Carol loans 1K secured. BCA loans 45K
secured
45K
1K
63
Problem 32.4, page 525
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K.
45K
32K
1K
64
Problem 32.4, page 525
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses.
45K
32K
1K
65
Problem 32.4, page 525
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances 31K?
45K
32K
1K
66
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed)
32K
32K
67
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed) What title passes at the
sale?
32K
32K
After
Before
68
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed) What title passes at the
sale? Buyer takes subject to 32K.
32K
32K
32K
32K
After
Before
69
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed) What title passes at the
sale? Buyer takes subject to 32K. What can BCA
expect from this sale?
32K
32K
32K
32K
After
Before
70
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed) What title passes at the
sale? Buyer takes subject to 32K. What can BCA
expect from this sale? Nothing. Bob beat BCA!
32K
32K
32K
32K
After
Before
71
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed) What title passes at the
sale? Buyer takes subject to 32K. What can BCA
expect from this sale? Nothing. Bob beat BCA!
32K
32K
32K
32K
After
Before
b. Same facts, except Carol had only a financing
statement on file?
72
Problem 32.4, page 525
45K
a. Carol loans 1K secured. BCA loans 45K
secured Assume boat worth about 32K. BCA
repossesses. What effect if Carol advances
31K? Advance will have priority 9-322(a)(1)
(provided SA signed) What title passes at the
sale? Buyer takes subject to 32K. What can BCA
expect from this sale? Nothing. Bob beat BCA!
32K
32K
32K
32K
After
Before
b. Same facts, except Carol had only a financing
statement on file? Still works.
73
Problem 32.5, page 526
BCA wants to continue lending in second position,
but doesnt want the first to be able to lend
more money after BCA makes its loan.
45K
32K
1K
74
Problem 32.5, page 526
BCA wants to continue lending in second position,
but doesnt want the first to be able to lend
more money after BCA makes its loan. How can BCA
accomplish that?
45K
32K
1K
75
Problem 32.5, page 526
BCA wants to continue lending in second position,
but doesnt want the first to be able to lend
more money after BCA makes its loan. How can BCA
accomplish that? Subordination agreements with
the first lenders.
45K
32K
1K
76
Problem 32.5, page 526
BCA wants to continue lending in second position,
but doesnt want the first to be able to lend
more money after BCA makes its loan. How can BCA
accomplish that? Subordination agreements with
the first lenders. Why would the first lenders
give them?
45K
32K
1K
77
Problem 32.5, page 526
BCA wants to continue lending in second position,
but doesnt want the first to be able to lend
more money after BCA makes its loan. How can BCA
accomplish that? Subordination agreements with
the first lenders. Why would the first lenders
give them? 1. Their borrowers want them.
45K
32K
1K
78
Problem 32.5, page 526
BCA wants to continue lending in second position,
but doesnt want the first to be able to lend
more money after BCA makes its loan. How can BCA
accomplish that? Subordination agreements with
the first lenders. Why would the first lenders
give them? 1. Their borrowers want them. 2.
First lender gives up only the right to make a
loan it doesnt want to make.
45K
32K
1K
79
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.

Inventory Lender
Security Interest
Speakers
Dealers
Sara
80
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
81
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
82
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
83
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
  • 9-324(b). A perfected purchase money security
    interest in inventory has priority over a
    conflicting security interest . . . if

84
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
  • 9-324(b). A perfected purchase money security
    interest in inventory has priority over a
    conflicting security interest . . . if
  • The PMSI is perfected when the debtor receives
    possession

85
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
  • 9-324(b). A perfected purchase money security
    interest in inventory has priority over a
    conflicting security interest . . . if
  • The PMSI is perfected when the debtor receives
    possession
  • The PMSI party sends an authenticated
    notification to the holder of the conflicting
    security interest

86
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
  • 9-324(b). A perfected purchase money security
    interest in inventory has priority over a
    conflicting security interest . . . if
  • The PMSI is perfected when the debtor receives
    possession
  • The PMSI party sends an authenticated
    notification to the holder of the conflicting
    security interest
  • The holder . . . receives the notification within
    five years before the debtor receives possession

87
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
  • 9-324(b). A perfected purchase money security
    interest in inventory has priority over a
    conflicting security interest . . . if
  • The PMSI is perfected when the debtor receives
    possession
  • The PMSI party sends an authenticated
    notification to the holder of the conflicting
    security interest
  • The holder . . . receives the notification within
    five years before the debtor receives possession
  • The notification states that the sender expects
    to acquire a PMSI in inventory and describes the
    inventory.

88
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

What problems do you foresee? What can Sara do
about them?
Inventory Lender
Security Interest
Speakers
Dealers
Sara
PMSI
  • 9-324(b). A perfected purchase money security
    interest in inventory has priority over a
    conflicting security interest . . . if
  • The PMSI is perfected when the debtor receives
    possession
  • The PMSI party sends an authenticated
    notification to the holder of the conflicting
    security interest
  • The holder . . . receives the notification within
    five years before the debtor receives possession
  • The notification states that the sender expects
    to acquire a PMSI in inventory and describes the
    inventory.

89
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Saras own Lender
Security Interest
Security Interest
Speakers
Dealers
Sara
SI
90
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Saras own Lender
Security Interest
Security Interest
Speakers
Dealers
Sara
SI
  • 9-325. A security interest created by a debtor
    Dealers is subordinate to a security interest
    in the same collateral created by another person
    Sara if

91
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Saras own Lender
Security Interest
Security Interest
Speakers
Dealers
Sara
SI
  • 9-325. A security interest created by a debtor
    Dealers is subordinate to a security interest
    in the same collateral created by another person
    Sara if
  • The debtor Dealers acquired the collateral
    subject to the security interest created by the
    other person Sara

92
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Saras own Lender
Security Interest
Security Interest
Speakers
Dealers
Sara
SI
  • 9-325. A security interest created by a debtor
    Dealers is subordinate to a security interest
    in the same collateral created by another person
    Sara if
  • The debtor Dealers acquired the collateral
    subject to the security interest created by the
    other person Sara
  • The security interest created by the other person
    Sara was perfected when the debtor Dealers
    acquired the collateral

93
Problem 32.6, page 526
  • Sara sells speakers on default, the inventory
    lender takes them.
  • How can Sara get priority? PMSI.
  • What must she do?

Inventory Lender
Saras own Lender
Security Interest
Security Interest
Speakers
Dealers
Sara
SI
  • 9-325. A security interest created by a debtor
    Dealers is subordinate to a security interest
    in the same collateral created by another person
    Sara if
  • The debtor Dealers acquired the collateral
    subject to the security interest created by the
    other person Sara
  • The security interest created by the other person
    Sara was perfected when the debtor Dealers
    acquired the collateral and
  • There is no period thereafter when the SI is
    unperfected.

94
Problem 32.7, page 526
Grumman owes Centurion 150K, unsecured Grumman
owes First 1.5M, secured by all assets
1.5M
1.5M
95
Problem 32.7, page 526
Grumman owes Centurion 150K, unsecured Grumman
owes First 1.5M, secured by all assets Firsts
financing statement does not show up on a search
1.5M
96
Problem 32.7, page 526
Grumman owes Centurion 150K, unsecured Grumman
owes First 1.5M, secured by all assets Firsts
financing statement does not show up on a
search Plan Centurion lends another 100K, gets
first position
1.5M
250K
97
Problem 32.7, page 526
Grumman owes Centurion 150K, unsecured Grumman
owes First 1.5M, secured by all assets Firsts
financing statement does not show up on a
search Plan Centurion lends another 100K, gets
first position. (Then First will refile.)
1.5M
1.5M
250K
98
Problem 32.7, page 526
  • Grumman owes Centurion 150K, unsecured
  • Grumman owes First 1.5M, secured by all assets
  • Firsts financing statement does not show up on a
    search
  • Plan Centurion lends another 100K, gets first
    position. (Then First will refile.)
  • Is there any way First could have an effective
    financing statement on file?

1.5M
250K
1.5M
99
Problem 32.7, page 526
  • Grumman owes Centurion 150K, unsecured
  • Grumman owes First 1.5M, secured by all assets
  • Firsts financing statement does not show up on a
    search
  • Plan Centurion lends another 100K, gets first
    position. (Then First will refile.)
  • Is there any way First could have an effective
    financing statement on file?

1.5M
1.5M
250K
In a state where collateral or debtor were
recently located Against a former owner of the
collateral. 9-507(a) Incorrectly indexed by
filing office error. 9-517
100
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
1.5M
1.5M
250K
101
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us?
1.5M
1.5M
250K
102
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant.
1.5M
1.5M
250K
103
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant. c. What should we do?
1.5M
1.5M
250K
104
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant. c. What should we do? Dont just
lend. We could be wrong.
1.5M
250K
1.5M
105
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant. c. What should we do? Dont just
lend. We could be wrong. Make a contingent
deal.
1.5M
1.5M
250K
106
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant. c. What should we do? Dont just
lend. We could be wrong. Make a contingent
deal. File a financing statement.
1.5M
1.5M
250K
107
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant. c. What should we do? Dont just
lend. We could be wrong. Make a contingent
deal. File a financing statement. Then give
First a call.
1.5M
1.5M
250K
108
Problem 32.7, page 526
b. Is it safe to search for a misindexed filing?
If we find an erroneous filing before we lend, is
it binding on us? No. 9-322(a)(1). Knowledge
is irrelevant. c. What should we do? Dont just
lend. We could be wrong. Make a contingent
deal. File a financing statement. Then give
First a call. d. Is there an ethical issue here?
1.5M
1.5M
250K
109
Problem 32.6, page 517
  • Grumman owes Centurion 150K, unsecured
  • Grumman owes First 1.5M, secured by all assets
  • Firsts financing statement does not show up on a
    search
  • Plan Centurion lends another 100K, gets first
    position. (Then First will refile.)
  • Is there any way First could have an effective
    financing statement on file?

1.5M
1.5M
250K
In a state where collateral or debtor were
recently located Against a former owner of the
collateral. 9-507(a) Incorrectly indexed by
filing office error. 9-517
110
Problem 32.6, page 517
Hypothetical The filing office wrongfully
rejects Firstbanks filing. Centurian knows that
Firstbank claims a SI, but gets a clean search
and purchases.
1.5M
1.5M
250K
111
Problem 32.6, page 517
Hypothetical The filing office wrongfully
rejects Firstbanks filing. Centurian knows that
Firstbank claims a SI, but gets a clean search
and purchases. 9-516(d). A record . . . the
filing office wrongfully refuses to accept is
effective, except as against a purchaser . . .
which gives value in reasonable reliance upon the
absence of the record from the files.
1.5M
1.5M
250K
112
Problem 32.6, page 517
Hypothetical The filing office wrongfully
rejects Firstbanks filing. Centurian knows that
Firstbank claims a SI, but gets a clean search
and purchases. 9-516(d). A record . . . the
filing office wrongfully refuses to accept is
effective, except as against a purchaser . . .
which gives value in reasonable reliance upon the
absence of the record from the files.
1.5M
1.5M
250K
Is Centurions reliance unreasonable?
113
Problem 32.6, page 517
Hypothetical The filing office wrongfully
rejects Firstbanks filing. Centurian knows that
Firstbank claims a SI, but gets a clean search
and purchases. 9-516(d). A record . . . the
filing office wrongfully refuses to accept is
effective, except as against a purchaser . . .
which gives value in reasonable reliance upon the
absence of the record from the files.
1.5M
1.5M
250K
Is Centurions reliance unreasonable? If not,
whose is?
114
Problem 32.6, page 517
Hypothetical The filing office wrongfully
rejects Firstbanks filing. Centurian knows that
Firstbank claims a SI, but gets a clean search
and purchases. 9-516(d). A record . . . the
filing office wrongfully refuses to accept is
effective, except as against a purchaser . . .
which gives value in reasonable reliance upon the
absence of the record from the files.
1.5M
1.5M
250K
Is Centurians reliance unreasonable? If not,
whose is? 9-338 Comment 2. A purchaser who has
not made itself aware of the information in the
filing office with respect to the debtor cannot
act in reasonable reliance upon incorrect
information.
115
Problem 32.6, page 517
Hypothetical The filing office wrongfully
rejects Firstbanks filing. Centurian knows that
Firstbank claims a SI, but gets a clean search
and purchases. 9-516(d). A record . . . the
filing office wrongfully refuses to accept is
effective, except as against a purchaser . . .
which gives value in reasonable reliance upon the
absence of the record from the files.
1.5M
1.5M
250K
Is Centurians reliance unreasonable? If not,
whose is? 9-338 Comment 2. A purchaser who has
not made itself aware of the information in the
filing office with respect to the debtor cannot
act in reasonable reliance upon incorrect
information. One who doesnt search. One who
knows of the rejection.
Write a Comment
User Comments (0)
About PowerShow.com