Administrative

1
Administrative

• Assignments we are likely to cover
• Assignment 18. Other financing statement
  information.
• Assignment 19. Perfection without filing.
• Assignments 22, 23, 24. Maintaining perfection.
• Assignment 26. Priority in State law.
• Assignment 28. Lien creditors vs. secured
  creditors.
• Assignment 32. Secured creditor vs. secured
  creditor.
• Assignment 36. Buyers vs. secured creditors.

2
Maintaining Perfection - statutes

• Chapter 7 Maintaining Perfection
• Over time Assignment 22 -
• A change in the debtors name 9-507(c).
• A change in the appearance or use of collateral
  9-507(b).
• Exchange of collateral for property or cash
  9-315(d).
• A change in the debtors location 9-316.

3
Where to file
Depends on the type of collateral
4
What is the debtors location?
5
What if debtors location changes?
9-316(a) A security interest perfected in the
appropriate jurisdiction remains perfected until
the earlier of (1) perfection ceases (2)
four months after the debtor moves or (3) one
year after transfer to a person located in
another jurisdiction. 9-316(b) If security
interest becomes perfected within the required
time after relocation, it remains perfected
thereafter.
6
Interstate movements Same Debtor
State A
State B
Ownership
9-316(a)(2) A security interest perfected
remains perfected until four months after a
change in the debtors location to another
jurisdiction.
7
Interstate movements New Debtor
State A
State B
Ownership
9-316(a)(3) A security interest perfected
remains perfected until one year after a transfer
to a debtor located in another jurisdiction.
8
Problem 24.1.
You are filing a financing statement on behalf
of Firstbank in connection with a loan to William
Shatner (inventor and professor) of 250,000.
Collateral is equipment, accounts and inventory
of Shatner Engineering located in Tuscon,
AZ. Louise Godfrey runs the business, but
Shatner makes all the big decisions. Shatner
teaches in Missouri, lives in Kansas, summers in
Arizona, and aims to retire in Hawaii.
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Problem 24.1.
If you had to choose one, which state would you
file in?
A. Hawaii
B. Kansas
Shatners current apartment
Shatners future domicile
C. Arizona
D. Missouri
Location of the business Godfrey, business
manager Shatners summer residence, owned home
Shatners office, nerve center
10
Problem 24.1. Statutes

• 1-201(28) Organization includes a
  corporation, government agency, estate, trust,
  partnership, or any other legal or commercial
  entity.
• 9-102(a)(28) Debtor means a person having an
  interest, other than a security interest, in the
  collateral.
• 9-301 Except as otherwise provided, (1) laws
  of the jurisdiction where debtor is located
  apply.
• 9-503(a)(4) Financing statement sufficiently
  provides name of debtor if it provides individual
  or organizational name ((a)(1) covers registered
  organization).
• 9-506(c) Financing statement not seriously
  misleading if search under debtors correct name
  would disclose financing statement.

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Problem 24.1. 9-307(b)

• Comment 2
• As a general rule, location of debtor determines
  jurisdiction for perfection.
• Individual located at principal residence.
• Chief executive office is place from which
  debtor manages the main part of its business
  operations or other affairs.
• It will be simple to determine.

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Problem 24.1.a. Where to file

• Identify the debtor Person or persons who own
  the collateral are the debtors 9-102(a)(28).
• William Shatner personally
• Principal residence 9-307(b)(1). Kansas,
  Arizona, Missouri, Hawaii.
• Shatner Engineering organization
• Its chief executive office 9-307(b)(3).
  Missouri, Arizona, Kansas, Hawaii.
• Louise Godfrey? Partner share of profits, yes.
  But then Shatner Engineering, a partnership, is
  the debtor.

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Problem 24.1.b. What debtor named should be
listed

• Depends on who the debtor is
• William Shatner personally
• William Shatner.
• Shatner Engineering, an organization
• Shatner Engineering.
• Partnership with Louise Godfrey
• Shatner Engineering, the partnership, and
  Louise Godfrey, a partner, under
  9-503(a)(4)(B).

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Problem 24.1.c.
Three years ago Shatner formed Shatner
Engineering Products, Inc. in Nevada Does
Shatner Engineering Products, Inc. own the
collateral? Only Shatner knows for sure, and the
burden is on him to show us. Of course, we can
always file in Nevada, too.
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Problem 24.1.d.

• Business is not incorporated, and Louise owns
  one-third as tenant in common
• Identify the debtor
• An organization (with more than one place of
  business 9-307(b)(3)).
• Its chief executive office 9-307(b)(3).
  Missouri, Arizona, Kansas.
• Name of debtor
• Shatner Engineering, William Shatner, and Louise
  Godfrey, under 9-503(a)(4)(B).

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Problem 24.2.a.
What should Firstbank do to monitor the location
of debtors?
9-316(a) A security interest perfected in the
appropriate jurisdiction remains perfected until
the earlier of (1) perfection ceases (2)
four months after the debtor moves or (3) one
year after transfer to a person located in
another jurisdiction. 9-316(b) If security
interest becomes perfected within the required
time after relocation, it remains perfected
thereafter.
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Problem 24.2.a.
What should Firstbank do to monitor the location
of debtors? Shatners principal
residence. Shatner Engineerings place of
incorporation. The owners of the business. The
owners of the collateral. Location of the chief
executive office. Members of the firm.
18
Problem 24.2.b.
Does your answer change if the loan were for 25
million?