1 / 69

Secured Transactions Assignment 1

Secured Transactions Assignment 1. Remedies of Unsecured Creditors under State Law. Basic concepts : time and money. Basic concepts: time and money. Basic concepts: time and money. Civil procedure (time line). Basic concepts: time and money. Civil procedure. Complaint.

octavia-noel
Download Presentation

Secured Transactions Assignment 1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Secured TransactionsAssignment 1 Remedies of Unsecured Creditors under State Law

  2. Basic concepts: time and money

  3. Basic concepts: time and money

  4. Basic concepts: time and money Civil procedure (time line)

  5. Basic concepts: time and money Civil procedure Complaint

  6. Basic concepts: time and money Civil procedure Service Complaint

  7. Basic concepts: time and money Civil procedure Service Complaint Answer

  8. Basic concepts: time and money Motion for summary judgment . . . Civil procedure Service Complaint Answer

  9. Basic concepts: time and money Motion for summary judgment . . . Civil procedure Service Complaint Answer or trial

  10. Basic concepts: time and money Motion for summary judgment . . . Civil procedure Service Judgment Complaint Answer or trial

  11. Basic concepts: time and money Motion for summary judgment . . . Civil procedure Service Judgment Complaint Answer or trial Levy

  12. Basic concepts: time and money Motion for summary judgment . . . Civil procedure Service Judgment Complaint Answer or trial Levy 30 days (default) to one year or more (with resistance)

  13. Basic concepts: time and money Motion for summary judgment . . . Civil procedure Service Judgment Complaint Answer or trial Levy 30 days (default) to one year or more (with resistance) 10 day minimum

  14. Basic concepts: time and money Summary procedure (small claims courts) Complaint

  15. Basic concepts: time and money Summary procedure (small claims courts) Service by mail Complaint

  16. Basic concepts: time and money Summary procedure (small claims courts) Service by mail Complaint Hearing

  17. Basic concepts: time and money Summary procedure (small claims courts) Service by mail Judgment Complaint Hearing

  18. Basic concepts: time and money Summary procedure (small claims courts) Service by mail Judgment Complaint Hearing 60 days

  19. Basic concepts: time and money Summary procedure (small claims courts) Service by mail Judgment Complaint Hearing Levy 60 days 10 day minimum Post judgment proceedings are generally the same as Civil Procedure

  20. Basic concepts: time and money

  21. Basic concepts: time and money

  22. Basic concepts: time and money

  23. Basic concepts: time and money

  24. Basic concepts: time and money

  25. Basic concepts: time and money

  26. Basic concepts: time and money For a bank to file complaint seeking foreclose on a $1 million business loan?

  27. Basic concepts: time and money For a bank to file complaint seeking foreclose on a $1 million business loan? 12 hours at $450/hour = $5,400.

  28. Basic concepts: time and money For a bank to file complaint seeking foreclose on a $1 million business loan? 12 hours at $450/hour = $5,400. For your memorandum in Legal Research & Writing?

  29. Basic concepts: remedies Money judgment: “Defendant owes plaintiff $5,000, for all of which let execution issue.” Issued at “end” of the case Does not order Defendant to pay Plaintiff enforces by other procedures Execution: Sheriff seizes and sells the debtor’s property to satisfy the judgment (five steps) 1. Clerk of court issues the writ 2. Sheriff levies on the debtor’s property (no self help) 3. Sheriff sells the property 4. Sheriff applies proceeds to pay down the debt 5. Sheriff files a “return,” which reduces the judgment

  30. Basic concepts: remedies Levy: Seizure of property pursuant to execution Sheriff must take physical possession (majority rule) Sheriff follows creditors’ “instructions for levy” Sheriff has liability for amercement / conversion Sheriff requires creditor to indemnify sheriff Exemptions (from execution): Property the sheriff cannot seize on a writ of execution “Necessities” specified by state statute Often limited by use or dollar amount Usually claimed at levy

  31. Basic concepts: remedies Prejudgment attachment Sheriff seizes property, as on execution Creditor must prove “extraordinary circumstances” Rare -- few creditors entitled California: Available after hearing on a business debt Self-help repossession: Creditor takes physical possession of debtor’s property Unsecured creditors are not entitled to self-help Conversion: “The wrongful exercise of dominion or control over the property of another.” Self-help is conversion. Wrongful execution is conversion. Remedy: Money judgment for market value. “You bought it.”

  32. Basic concepts: remedies • Setoff: If – $100 A B $100

  33. Basic concepts: remedies Setoff: If – either can “setoff” the debt it owes against the debt owing to it $100 A B $100

  34. Basic concepts: remedies Setoff: If – No debt either can “setoff” the debt it owes against the debt owing to it A B

  35. Basic concepts: remedies • Setoff: If the amounts owing are not equal – $100 A B $36

  36. Basic concepts: remedies • Setoff: If the amounts owing are not equal – • a portion of the larger debt will survive $100 A B $36

  37. Basic concepts: remedies • Setoff: If the amounts owing are not equal – • a portion of the larger debt will survive $64 A B

  38. Basic concepts: remedies Setoff example: Debtor owes Bank for $30,000 loan Debtor has $1,637 in an account at Bank Loan $30,000 Debtor Bank $1,637 Bank account

  39. Basic concepts: remedies Setoff example: Debtor owes Bank for $30,000 loan Debtor has $1,637 in an account at Bank On default, Bank can “set off” the bank account by changing the account balance to zero, then sending notice to debtor. Loan $30,000 Debtor Bank $1,637 Bank account

  40. Basic concepts: remedies Setoff example: Debtor owes Bank for $30,000 loan Debtor has $1,637 in an account at Bank On default, Bank can “set off” the bank account by changing the account balance to zero, then sending notice to debtor. Loan $28,363 Debtor Bank 0 Bank account

  41. Basic concepts: remedies Fraudulent Transfers: §4(a)(1). A transfer . . . is fraudulent . . . if the debtor made the transfer . . . with actual intent to hinder, delay, or defraud any creditor . . . . §8(a) A transfer is not avoidable under Section 4(a)(a) against a person who took in good faith and for a reasonably equivalent value . . . . Example: George sells his property to Alice for $1, so that his creditors can’t take it. Fraudulent transfer (4)(a), Alice has no defense (8)(a). Alice has a defense if she paid reasonably equivalent value.

  42. Basic concepts: remedies §5(a). A transfer . . . is fraudulent . . . if the debtor made the transfer . . . without receiving a reasonably equivalent value in exchange . . . and the debtor was insolvent . . . or became insolvent as a result of the transfer. Example: George is desperate for cash. He sells assets worth $1 million to Alice for $500,000 (best price he can get now). The transfer is fraudulent, reversible, regardless of intent. Debtors can’t make bad deals. Even with strangers! BP Deepwater Horizon spill. Difficulty selling assets. §3(a). Value is given for a transfer . . . if, in exchange for the transfer . . . an antecedent debt is . . . satisfied . . . . Example: Bernie Madoff uses his last billion to pay the management fees owing to his sons’ brokerage.

  43. Problem constraints Legal strategy is subject to constraints – chess board • Law (delivered). What officials will actually do. • Procedural rules • Costs • Client goals • Attitudes and personalities of people involved • Media pressures “Basic concepts” – how the chess pieces move

  44. Problem 1.1, page19 Benning lends $50,000 to Knopf, payable in quarterly installments, with interest at prime plus five points. Loan is not currently in default Conditions now are worse than at time of the loan, Knopf is behind on rent and utility payments What do you advise?

  45. Problem 1.2, page 20 $12,000 Judgment Service Complaint Default

  46. Problem 1.2, page 20 What happens now? What do we need to know? How do we collect? $12,000 Judgment Service Complaint Default

  47. Problem 1.2, page 20 What happens now? What do we need to know? How do we collect? Should we send the sheriff to levy on the day care equipment now? $12,000 Judgment Service Complaint Default

  48. Problem 1.3, page 20 Jeff plans to take the lawn furniture. Can he do that? If Jeff can’t take the furniture, what can he do? Lisa Jeff $1K Loan

  49. Problem 1.4, page 20 Kostandin owes Look $30,000 Look Kostandin $30,000

  50. Problem 1.4, page 20 Kostandin owes Look $30,000 So Look defrauds Kostandin of $30,000 in lobsters Look Kostandin $30,000

More Related