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Secured Transactions Assignment 21

Secured Transactions Assignment 21. Characterizing Collateral and Transactions. The Big Picture. Part Two: The Creditor Third Party Relationship Chapter 6-7: Perfection Assignment 16: Personal Property Filing Systems Assignment 17: Financing Statements: The Debtor’s Name

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Secured Transactions Assignment 21

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  1. Secured TransactionsAssignment 21 Characterizing Collateral and Transactions

  2. The Big Picture Part Two: The Creditor Third Party Relationship Chapter 6-7: Perfection Assignment 16: Personal Property Filing Systems Assignment 17: Financing Statements: The Debtor’s Name Assignment 18: Financing Statements: Other Information Assignment 19: Exceptions to Filing Assignment 20: Real Estate Recording Systems Assignment 21: Characterizing Collateral and Transactions

  3. Characterizing Promises to Pay Money §9-102(a)(11). “Chattel paper” means . . . records that evidence both a monetary obligation and a security interest in specific goods . . . .”

  4. Characterizing Promises to Pay Money §9-102(a)(11). “Chattel paper” means . . . records that evidence both a monetary obligation and a security interest in specific goods . . . .” Chattel Paper Chattel paper is chattel paper

  5. Characterizing Promises to Pay Money §9-102(a)(47). “Instrument” means a negotiable instrument Chattel Paper Chattel paper is chattel paper

  6. Characterizing Promises to Pay Money §9-102(a)(47). “Instrument” means a negotiable instrument or any other writing that [1] evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease and [3] is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement . . .” Chattel Paper Chattel paper is chattel paper

  7. Characterizing Promises to Pay Money §9-102(a)(47). “Instrument” means a negotiable instrument or any other writing that [1] evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease and [3] is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement . . .” Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper

  8. Characterizing Promises to Pay Money §9-102(a)(2).“Account” means a right to payment of a monetary obligation . . . (i) for property that has been . . .sold, (ii) for services rendered . . . Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper

  9. Characterizing Promises to Pay Money §9-102(a)(2).“Account” means a right to payment of a monetary obligation . . . (i) for property that has been . . .sold, (ii) for services rendered . . . The term does not include (i) rights . . . evidenced by chattel paper or an instrument. Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper

  10. Characterizing Promises to Pay Money §9-102(a)(2).“Account” means a right to payment of a monetary obligation . . . (i) for property that has been . . .sold, (ii) for services rendered . . . The term does not include (i) rights . . . evidenced by chattel paper or an instrument. Accounts An account is an account if it is not an instrument or chattel paper Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper

  11. Characterizing Promises to Pay Money §9-102(a)(61). “Payment intan-gible” means a general intangible [that is] a monetary obligation. Accounts An account is an account if it is not an instrument or chattel paper Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper

  12. Characterizing Promises to Pay Money §9-102(a)(61). “Payment intan-gible” means a general intangible [that is] a monetary obligation. Accounts An account is an account if it is not an instrument or chattel paper Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper §9-102(a)(42). “General intangible” means personal property other than accounts, chattel paper . . . instruments . . .

  13. Characterizing Promises to Pay Money §9-102(a)(61). “Payment intan-gible” means a general intangible [that is] a monetary obligation. A payment intangible is a payment intangible if it is not an account, instrument, or chattel paper Payment intangibles Accounts An account is an account if it is not an instrument or chattel paper Instruments An instrument is an instrument if it is not chattel paper Chattel Paper Chattel paper is chattel paper §9-102(a)(42).“General intangible” means personal property other than accounts, chattel paper . . . instruments . . .

  14. Characterizing Goods This box represents the category of “all goods.”

  15. Characterizing Goods Inventory and farm products are goods held by businesses for sale.

  16. Characterizing Goods “Equipment” is goods held by a businesses not for sale.

  17. Characterizing Goods “Consumer goods” are goods used or bought for personal, family, or household purposes” – not business use.

  18. Characterizing Goods Equipment, farm products, or consumer goods may be fixtures.

  19. Characterizing Goods Equipment, farm products, or consumer goods may be fixtures.

  20. Characterizing Goods Equipment, farm products, or consumer goods may be fixtures.

  21. Characterizing Goods Equipment, farm products, or consumer goods may be fixtures.

  22. Basic Concepts §9-109(a)(3). [Article 9] applies to . . . a sale of accounts, chattel paper, payment intangibles, or promissory notes §1-201(b)(35). “‘Security interest’ includes any interest of a buyer of accounts . . . .” §9-102(a)(72). “Secured party’ means . . . a person to which accounts . . . have been sold” §9-102(a)(28). “Debtor’ means . . . a seller of accounts . . .” Comment 5. “The principal effect . . . is to apply this article’s perfection and priority rules to these sales transaction”

  23. Basic Concepts Sale of accounts Seller Buyer Debt and equity Accounts owing Account debtors Investors

  24. Basic Concepts Article 9 tells us to re-label. Sale of accounts Seller Buyer Debt and equity Accounts owing Account debtors Investors

  25. Basic Concepts Article 9 tells us to re-label. Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors

  26. Basic Concepts Article 9 tells us to re-label. Who owns the accounts? §9-623(c) Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors

  27. Basic Concepts Article 9 tells us to re-label. Who owns the accounts? §9-623(c) Octagon Gas: the debtor Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors

  28. Basic Concepts Article 9 tells us to re-label. Who owns the accounts? §9-623(c) Octagon Gas: the debtor Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors Bankruptcy Code §541(a). The estate owns “all legal or equitable interests of the debtor in property of the estate.”

  29. Basic Concepts Article 9 tells us to re-label. Who owns the accounts? §9-623(c) Octagon Gas: the debtor Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors Bankruptcy Code §541(a). The estate owns “all legal or equitable interests of the debtor in property of the estate.” §362(a). Bankruptcy stays “any act . . . to exercise control over property of the estate.”

  30. Basic Concepts Article 9 tells us to re-label. Who owns the accounts? §9-623(c) Octagon Gas: the debtor Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors Bankruptcy Code §541(a). The estate owns “all legal or equitable interests of the debtor in property of the estate.” §362(a). Bankruptcy stays “any act . . . to exercise control over property of the estate.” §363(b)(1). “The trustee . . . may use . . . property of the estate”

  31. Basic Concepts Article 9 tells us to re-label. Who owns the accounts? §9-623(c) Octagon Gas: the debtor Security interest Debtor Secured party Debt and equity Accounts owing Account debtors Investors Bankruptcy Code §541(a). The estate owns “all legal or equitable interests of the debtor in property of the estate.” §362(a). Bankruptcy stays “any act . . . to exercise control over property of the estate.” §363(b)(1). “The trustee . . . may use . . . property of the estate” §9-318(1). “A debtor that has sold an account . . . does not retain a legal or equitable interest in the collateral sold.”

  32. Basic Concepts Security interest §9-310(a). A financing statement must be filed to perfect all security interests except: [9-309(2), (3), and (4)]. Debtor Secured party Debt and equity Accounts owing Account debtors Investors Bankruptcy Code §541(a). The estate owns “all legal or equitable interests of the debtor in property of the estate.” §362(a). Bankruptcy stays “any act . . . to exercise control over property of the estate.” §363(b)(1). “The trustee . . . may use . . . property of the estate” §9-318(1). “A debtor that has sold an account . . . does not retain a legal or equitable interest in the collateral sold.”

  33. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)?

  34. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11).

  35. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record.

  36. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument?§9-102(a)(47).

  37. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47).No writing.

  38. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47). No writing. • Account?

  39. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47). No writing. • Account? §9-102(a)(2) “right to payment of a monetary obligation (i) for property that has been sold.”

  40. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47). No writing. • Account? §9-102(a)(2) “right to payment of a monetary obligation (i) for property that has been sold.” • Payment intangible?

  41. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47). No writing. • Account? §9-102(a)(2) “right to payment of a monetary obligation (i) for property that has been sold.” • Payment intangible? Not if it is an account. §9-102(a)(42)

  42. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47). No writing. • Account? §9-102(a)(2) “right to payment of a monetary obligation (i) for property that has been sold.” • Payment intangible? Not if it is an account. §9-102(a)(42) • How does one perfect in an account? §9-310(a) and (b).

  43. Problem 21.1, page 376 • How should a secured party perfect in: • Money owing from sale of liquor license (oral agreement)? • Chattel paper? §9-102(a)(11). No record. • Instrument? §9-102(a)(47). No writing. • Account? §9-102(a)(2) “right to payment of a monetary obligation (i) for property that has been sold.” • Payment intangible? Not if it is an account. §9-102(a)(42) • How does one perfect in an account? §9-310(a) and (b). • File.

  44. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Secured Security interest Buyer Sale Mortgagee Mortgagor

  45. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Article 9 applies. §9-109(b). Secured Security interest Buyer Sale Mortgagee Mortgagor

  46. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Article 9 applies. §9-109(b). Secured perfects in the payment right. That perfects in the mortgage. §9-308(e) Secured Security interest Buyer Sale Mortgagee Mortgagor Payment right

  47. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Article 9 applies. §9-109(b). Secured perfects in the payment right. That perfects in the mortgage. §9-308(e) Secured Security interest Buyer Payment right Sale Mortgagee Mortgagor

  48. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Article 9 applies. §9-109(b). Secured perfects in the payment right. That perfects in the mortgage. §9-308(e) Secured Security interest Buyer Sale Mortgagee Mortgagor The payment right could be:

  49. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Article 9 applies. §9-109(b). Secured perfects in the payment right. That perfects in the mortgage. §9-308(e) Secured Security interest Buyer Sale Mortgagee Mortgagor • The payment right could be: • An instrument, if it is negotiable note or rough equivalent

  50. Problem 21.1, page 376 b. How does Secured perfect a security interest in this mortgage? Article 9 applies. §9-109(b). Secured perfects in the payment right. That perfects in the mortgage. §9-308(e) Secured Security interest Buyer Sale Mortgagee Mortgagor • The payment right could be: • An instrument, if it is negotiable note or rough equivalent • An account, if it is not an instrument and the mortgage was given as the purchase price of the property

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