1
Secured TransactionsAssignment 23
Maintaining Perfection Through Changes of Name, Identity, and Use
2
The Big PicturePart Two: The Creditor Third Party Relationship
Chapter 6: Perfection
Chapter 7: Maintaining Perfection
Assignment 22: Through lapse and bankruptcy
Assignment 23: Through changes in name, identity and use of collateral
Assignment 24: Through interstate movements of debtors and collateral
Chapter 8-9: Priority
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The Big PicturePart Two: The Creditor Third Party Relationship
Chapter 6: Perfection
Chapter 7: Maintaining Perfection
Assignment 22: Through lapse and bankruptcy
Assignment 23: Through changes in name, identity and use of collateral
Assignment 24: Through interstate movements of debtors and collateral
Chapter 8-9: Priority
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S1 Filing
Debtor’s name
Collateraldescription
Changes
Perfection-maintenance Problem
Name changeSale to new ownerCollateral transformedChange of useProceeds exchangeNew debtor
6
S1 Filing S2 Search
Debtor’s name
Collateraldescription
New name
New owner
Differentdescription
Changes
Name changeSale to new ownerCollateral transformedChange of useProceeds exchangeNew debtor
Perfection-maintenance Problem
7
S1 Filing S2 Search
Debtor’s name
Collateraldescription
New name
New owner
Differentdescription
Changes
Two approaches mixed:
Perfection-maintenance Problem
Name changeSale to new ownerCollateral transformedChange of useProceeds exchangeNew debtor
8
S1 Filing S2 Search
Debtor’s name
Collateraldescription
Changes
Two approaches mixed:
1. Filer updates the filings as changes occur
Perfection-maintenance Problem
Name changeSale to new ownerCollateral transformedChange of useProceeds exchangeNew debtor
New name
New owner
Differentdescription
9
S1 Filing S2 Search
Debtor’s name
Collateraldescription
Changes
Two approaches mixed:
1. Filer updates the filings as changes occur
2. Searcher must discover history of name and description
Perfection-maintenance Problem
Name changeSale to new ownerCollateral transformedChange of useProceeds exchangeNew debtor
New name
New owner
Differentdescription
12
Name Changes, §9-507(c)
Filing
Seriously misleadingname change
A seriously misleading name change creates a four-month window.
4 months
13
Name Changes, §9-507(c)
Filing
Seriously misleadingname change
4 months
A seriously misleading name change creates a four-month window.
If filer amends within four months, filing is valid for all collateral
Amendment
14
Name Changes, §9-507(c)
Filing
Seriously misleadingname change
4 months
A seriously misleading name change creates a four-month window.
If filer amends within four months, filing is valid for all collateral
Amendment
If collateral is acquired this date
15
Name Changes, §9-507(c)
Filing
Seriously misleadingname change
4 months
A seriously misleading name change creates a four-month window.
If filer amends within four months, filing is valid for all collateral
If filer does not amend within four months, filing is valid against collateral acquired before the end of four months
If collateral is acquired this date
Now
16
Name Changes, §9-507(c)
Filing
Seriously misleadingname change
4 months
A seriously misleading name change creates a four-month window.
If filer amends within four months, filing is valid for all collateral
If filer does not amend within four months, filing is valid against collateral acquired before the end of four months
If collateral is acquired this date
Now
17
Name Changes, §9-507(c)
Filing
Seriously misleadingname change
4 months
A seriously misleading name change creates a four-month window.
If filer amends within four months, filing is valid for all collateral
If filer does not amend within four months, filing is valid against collateral acquired before the end of four months
If filer amends late, amendment is effective, Comment 4. but priority is only from the Amendment
Amendment
If collateral is acquired this date If acquired this date
19
Change in owner (debtor), §9-507(a)Sam sells the
collateralto Beth Buyer
S1 files againstSam Seller
20
Change in owner (debtor), §9-507(a)
“A filed financing statement remains effective with respect to collateral that is sold . . . even if the secured party knows of . . . the disposition.”
S1 files againstSam Seller
Sam sells the collateral
to Beth Buyer
21
Change in owner (debtor), §9-507(a)
“A filed financing statement remains effective with respect to collateral that is sold . . . even if the secured party knows of . . . the disposition.”
S1 filing is effective. How would S2 find it?
Beth Buyerborrowsfrom S2
S1 files againstSam Seller
Sam sells the collateral
to Beth Buyer
22
Change in owner (debtor), §9-507(a)
“A filed financing statement remains effective with respect to collateral that is sold . . . even if the secured party knows of . . . the disposition.”
S1 filing is effective. How would S2 find it?
Comment 3. “[A]ny person seeking to determine whether a debtor owns collateral free of security interests must inquire as to the debtor’s source of title and, if circumstances seem to require it, search in the name of a former owner.”
S1 files againstSam Seller
Sam sells the collateral
to Beth Buyer
Beth Buyerborrowsfrom S2
23
Change in owner (debtor), §9-507(a)
“A filed financing statement remains effective with respect to collateral that is sold . . . even if the secured party knows of . . . the disposition.”
S1 filing is effective. How would S2 find it?
Comment 3. “[A]ny person seeking to determine whether a debtor owns collateral free of Every searcher must inquire as to the debtor’s source of title and, if circumstances seem to require it, search in the name of a former owner.”
S1 files againstSam Seller
Sam sells the collateral
to Beth Buyer
Beth Buyerborrowsfrom S2
25
Changes in collateral: Physical/use
Filing
§9-507(b). A financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9-506.
Physical/use change incollateral Search
26
Changes in collateral: Physical/use
Filing
§9-507(b). A financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9-506.
The financing statement remains effective
Physical/use change incollateral Search
27
Changes in collateral: Physical/use
Filing
§9-507(b). A financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9-506.
The financing statement remains effective
The secured party may not remain perfected. E.g., auto parts become an auto; auto use changed from equipment to inventory.
Physical/use change incollateral Search
29
Filing
Three kinds of changes:
Collateral exchangedfor proceeds Search
Changes in collateral: Proceeds
30
Filing
Three kinds of changes:
Type 0: The description still indicates the collateral (No change)
Collateral exchangedfor proceeds Search
Changes in collateral: Proceeds
31
Filing
Three kinds of changes:
Type 0: The description still indicates the collateral (No change)
Type 1: The description is seriously misleading, but the filing is in the right office for the new collateral.
Collateral exchangedfor proceeds Search
Changes in collateral: Proceeds
32
Filing
Three kinds of changes:
Type 0: The description still indicates the collateral (No change)
Type 1: The description is seriously misleading, but the filing is in the right office for the new collateral.
Type 2: The filing is in the wrong office for the new collateral
Collateral exchangedfor proceeds Search
Changes in collateral: Proceeds
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9-315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
Changes in collateral: Proceeds
34
9-315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(d) A perfected security interest in proceeds becomes unperfected on the 21st day after [attachment] unless
Changes in collateral: Proceeds
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9-315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(d) A perfected security interest in proceeds becomes unperfected on the 21st day after [attachment] unless:
(1) The following conditions are satisfied:
(A) a filed financing statement covers the original collateral
(B) . . . a security interest [in the proceeds] may perfected by filing in [that same office]
(C) the proceeds are not acquired with cash proceeds
Changes in collateral: Proceeds
36
9-315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(d) A perfected security interest in proceeds becomes unperfected on the 21st day after [attachment] unless:
(1) The following conditions are satisfied:
(A) a filed financing statement covers the original collateral
(B) . . . a security interest [in the proceeds] may perfected by filing in [that same office]
(C) the proceeds are not acquired with cash proceeds
(2) the proceeds are identifiable cash proceeds; or
Changes in collateral: Proceeds
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9-315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(d) A perfected security interest in proceeds becomes unperfected on the 21st day after [attachment] unless:
(1) The following conditions are satisfied:
(A) a filed financing statement covers the original collateral
(B) . . . a security interest [in the proceeds] may perfected by filing in [that same office]
(C) the proceeds are not acquired with cash proceeds
(2) the proceeds are identifiable cash proceeds; or
(3) the security interest in the proceeds is perfected . . . when the security interest attaches or within 20 days . . .
Changes in collateral: Proceeds
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More Big PicturePerfection requires:
1. Attachment and
2. Compliance with perfection requirements
§9-308(a). [A] security interest is perfected if it has attached and all of the application requirements for perfection in Sections 9-301 through 9-316 have been satisfied.
If secured party doesn’t have a security interest, secured party isn’t perfected.
39
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
40
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48)
41
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No.
42
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
43
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
44
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist?
45
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
46
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
Does GBT still have SI? §9-315(a).
47
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
Does GBT still have SI? §9-315(a). Perfected? §9-507(a).
48
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
Does GBT still have SI? §9-315(a). Perfected? §9-507(a).
c. BBW trades an inventory boat for a forklift.
Does GBT have a security interest in the forklift? Yes. §9-315(a)(2).
49
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
Does GBT still have SI? §9-315(a). Perfected? §9-507(a).
c. BBW trades an inventory boat for a forklift.
Does GBT have a security interest in the forklift? Yes. §9-315(a)(2).
50
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
Does GBT still have SI? §9-315(a). Perfected? §9-507(a).
c. BBW trades an inventory boat for a forklift.
Does GBT have a security interest in the forklift? Yes. §9-315(a)(2).
Is that security interest perfected? Yes. §9-315(d)(1).
51
Problem 23.1, page 407GBT is monitoring collateral of Bonnie’s Boat World, Inc. The
description is: “inventory, accounts, and chattel paper”
a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? §9-102(a)(48) No. Is GBT still perfected?
Type 1 change, inventory to equipment. §9-507(b). No new filing needed. (Assuming no boat certificate of title law.)
b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check.
Does GBT still have SI? §9-315(a). Perfected? §9-507(a).
c. BBW trades an inventory boat for a forklift.
Does GBT have a security interest in the forklift? Yes. §9-315(a)(2).
Is that security interest perfected? Yes. §9-315(d)(1).
52
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
53
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3).
54
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days
55
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days
e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. §9-102(a)(64)
56
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days
e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. §9-102(a)(64)
57
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days
e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. §9-102(a)(64)
GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds?
58
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days
e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. §9-102(a)(64)
GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds?
Only for 20 days. §9-109(d)(8); §9-315(c) and (d)
59
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days
e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. §9-102(a)(64)
GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds?
Only for 20 days. §9-109(d)(8); §9-315(c) and (d)
How can GBT continue perfection after 20 days?
60
Problem 23.1, page 407Description of collateral: “inventory, accounts, and chattel paper”
d. Inventory boat sold for cash, cash used to buy forklift.
Does GBT have a security interest in forklift? §9-315(a)(2)
Is GBT perfected in the forklift? §9-315(d)(3). Not after 20 days.
e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. §9-102(a)(64)
GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds?
Only for 20 days. §9-109(d)(8); §9-315(c) and (d)
How can GBT continue perfection after 20 days?
Be named loss payee on policy. §9-315(d)(3) governs.
62
Problem 23.2, page 408
Filing Name change Now
6 months
GBT files against Southwest Appliance Corporation in that name
Six months ago, debtor changed its name to Southwest General, Inc.
63
Problem 23.2, page 408
Filing Name change Now
6 months
GBT files against Southwest Appliance Corporation in that name
Six months ago, debtor changed its name to Southwest General, Inc.
Is GBT’s filing seriously misleading?
64
Problem 23.2, page 408
Filing Name change Now
6 months
GBT files against Southwest Appliance Corporation in that name
Six months ago, debtor changed its name to Southwest General, Inc.
Is GBT’s filing seriously misleading? Almost certainly. 9-506(c).
65
Problem 23.2, page 408
Filing
Seriously misleadingname change
§9-507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand?
4 months
Now
66
Problem 23.2, page 408
Filing
Seriously misleadingname change
§9-507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand?
Not perfected in recently acquired inventory.
Now
4 months
67
Problem 23.2, page 408
Filing
Seriously misleadingname change
§9-507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand?
Not perfected in recently acquired inventory.
a. What do we do now?
Now
4 months
68
Problem 23.2, page 408
Filing
Seriously misleadingname change
§9-507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand?
Not perfected in recently acquired inventory.
a. What do we do now? Amend.
Amendment
4 months
69
Problem 23.2, page 408
Filing
Seriously misleadingname change
§9-507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand?
Not perfected in recently acquired inventory.
a. What do we do now? Amend.
Then what is our priority date?
Amendment
4 months
70
Problem 23.2, page 408
Filing
Seriously misleadingname change
§9-507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand?
Not perfected in recently acquired inventory.
a. What do we do now? Amend.
Then what is our priority date? Filing date (collateral acquired through four months); amendment date (collateral acquired after four months). §9-507 Comment 4.
Amendment
4 months
71
Problem 23.2, page 408
Filing
Seriously misleadingname change
4 months
b. What if GBT’s collateral had been a construction crane?
72
Problem 23.2, page 408
Filing
Seriously misleadingname change
4 months
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
73
Problem 23.2, page 408
Filing
Seriously misleadingname change
4 months
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
Do we need to amend?
74
Problem 23.2, page 408
Filing
Seriously misleadingname change Sale
4 months
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
c. What if Southwest sells the crane for $235,000?
Do we need to amend?
75
Problem 23.2, page 408
Filing
Seriously misleadingname change Sale
4 months
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
c. What if Southwest sells the crane for $235,000?
The financing statement remains effective against the crane
Do we need to amend?
76
Problem 23.2, page 408
Filing
Seriously misleadingname change Sale
4 months
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
c. What if Southwest sells the crane for $235,000?
The financing statement remains effective against the crane
The financing statement is not effective against the cash
Do we need to amend?
77
Problem 23.2, page 408
Filing
Seriously misleadingname change
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
c. What if Southwest sells the crane for $235,000?
The financing statement remains effective against the crane
The financing statement is not effective against the cash
GBT is perfected in the cash §9-315(c) and (d)(2)
Sale
4 months
Do we need to amend?
78
Problem 23.2, page 408
Filing
Seriously misleadingname change
b. What if GBT’s collateral had been a construction crane?
The financing statement remains effective against the crane
c. What if Southwest sells the crane for $235,000?
The financing statement remains effective against the crane
The financing statement is not effective against the cash
GBT is perfected in the cash §9-315(c) and (d)(2)
What if Southwest buys a replacement crane? §9-315(d)(3)
Sale
4 months
Do we need to amend?
79
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Problem 23.3, page 408
80
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Prior financing statement: “Lawn dogs manufactured by Suti.”
Problem 23.3, page 408
81
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Prior financing statement: “Lawn dogs manufactured by Suti.”
Could that security interest be attached to more than the lawn dogs?
Problem 23.3, page 408
82
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Prior financing statement: “Lawn dogs manufactured by Suti.”
Could that security interest be attached to more than the lawn dogs?
Yes. As proceeds, Problem 10.4.
Problem 23.3, page 408
83
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Prior financing statement: “Lawn dogs manufactured by Suti.”
Could that security interest be attached to more than the lawn dogs?
Yes. As proceeds, Problem 10.4. Or by SA description
Problem 23.3, page 408
84
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Prior financing statement: “Lawn dogs manufactured by Suti.”
Could that security interest be attached to more than the lawn dogs?
Yes. As proceeds, Problem 10.4. Or by SA description
Could that security interest be perfected in more than the lawn dogs?
Problem 23.3, page 408
85
GBT’s proposed loan: $500,000 to RLE, secured by:
1. Equipment
2. Inventory (minus “lawn dogs manufactured by Suti”)
3. Accounts
4. Money in bank accounts
Prior financing statement: “Lawn dogs manufactured by Suti.”
Could that security interest be attached to more than the lawn dogs?
Yes. As proceeds, Problem 10.4. Or by SA description
Could that security interest be perfected in more than the lawn dogs?
Yes, accounts, barter, cash. §9-315(c), (d)(1), (d)(2)
Problem 23.3, page 408
86
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account?
Problem 23.5
87
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account?
Problem 23.5
88
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account?
Problem 23.5
89
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account?
Problem 23.5
90
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account?
Problem 23.5
91
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account?
Problem 23.5
92
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account? No
Problem 23.5
93
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account? No
d. Does it matter if Beaver commingles other money in the account?
Problem 23.5
94
October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts.”
a. Does October have a security interest in debtor’s bank account at Gargantuan?
Yes. By description
Yes. If proceeds.
b. Is October perfected in the bank account?
As original collateral: Only if October has “control”
As proceeds: Yes, to the extent “identifiable,” §9-315(d)(2)
c. Does it matter how long the proceeds are in the account? No
d. Does it matter if Beaver commingles other money in the account? No.
Problem 23.5