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Secured Transactions Assignment 22

Secured Transactions Assignment 22. Maintaining Perfection Through Lapse and Bankruptcy. The Big Picture. Part Two: The Creditor Third Party Relationship Chapter 6: Perfection Chapter 7: Maintaining Perfection Assignment 22: Through lapse and bankruptcy

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Secured Transactions Assignment 22

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  1. Secured TransactionsAssignment 22 Maintaining Perfection Through Lapse and Bankruptcy

  2. The Big Picture Part 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

  3. The Big Picture Part 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

  4. The Big Picture Part 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

  5. The Big Picture Part 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

  6. The Lapse Problem UCC filing system RE recording system

  7. The Lapse Problem UCC filing system RE recording system Adds documents, never removes documents

  8. The Lapse Problem UCC filing system RE recording system Adds documents, never removes documents 1. Mortgage

  9. The Lapse Problem UCC filing system RE recording system Adds documents, never removes documents 1. Mortgage 2. Satisfaction of mortgage

  10. The Lapse Problem UCC filing system May physically destroy documents after six years RE recording system Adds documents, never removes documents 1. Mortgage 2. Satisfaction of mortgage

  11. The Lapse Problem UCC filing system May physically destroy documents after six years 1. Financing statement RE recording system Adds documents, never removes documents 1. Mortgage 2. Satisfaction of mortgage

  12. The Lapse Problem UCC filing system May physically destroy documents after six years 1. Financing statement 2. Termination statement RE recording system Adds documents, never removes documents 1. Mortgage 2. Satisfaction of mortgage

  13. The Lapse Problem UCC filing system May physically destroy documents after six years 1. Financing statement 2. Termination statement Automatic termination at five years RE recording system Adds documents, never removes documents 1. Mortgage 2. Satisfaction of mortgage

  14. The Lapse Problem UCC filing system May physically destroy documents after six years 1. Financing statement 2. Termination statement Automatic termination at five years, so: 3. Continuation statement(at approximately five year intervals) RE recording system Adds documents, never removes documents 1. Mortgage 2. Satisfaction of mortgage

  15. Basic Concepts Temporary (automatic) perfection:

  16. Basic Concepts Temporary (automatic) perfection: General rule: Perfection by possession “continues only while the secured party retains possession.” §9-313(d)

  17. Basic Concepts Temporary (automatic) perfection: General rule: Perfection by possession “continues only while the secured party retains possession.” §9-313(d) Exception: Secured party who “makes goods available” for “ultimate sale” remains perfected for 20 days. §9-312(f).

  18. Basic Concepts • Temporary (automatic) perfection: • General rule: Perfection by possession “continues only while the secured party retains possession.” §9-313(d) • Exception: Secured party who “makes goods available” for “ultimate sale” remains perfected for 20 days. §9-312(f). • Searcher on goods has three tasks:

  19. Basic Concepts • Temporary (automatic) perfection: • General rule: Perfection by possession “continues only while the secured party retains possession.” §9-313(d) • Exception: Secured party who “makes goods available” for “ultimate sale” remains perfected for 20 days. §9-312(f). • Searcher on goods has three tasks: • Search filings • Examine goods for possession

  20. Basic Concepts • Temporary (automatic) perfection: • General rule: Perfection by possession “continues only while the secured party retains possession.” §9-313(d) • Exception: Secured party who “makes goods available” for “ultimate sale” remains perfected for 20 days. §9-312(f). • Searcher on goods has three tasks: • Search filings • Examine goods for possession • Determine if goods were possessed in previous 20 days

  21. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case

  22. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case Bailee perfected by possession

  23. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case Bailee perfected by possession Bailee surrenders possession

  24. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case Bailee perfected by possession Bailee surrenders possession Deadline to perfect 20 days • §9-312(f) A perfected security interest in a negotiable document or goods in the possession of a bailee . . . remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of • ultimate sale or exchange; or • . . . otherwise dealing with them . . . preliminary to their sale or exchange.

  25. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case Bailee perfected by possession Bailee surrenders possession Deadline to perfect 20 days Bankruptcy • §9-312(f) A perfected security interest in a negotiable document or goods in the possession of a bailee . . . remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of • ultimate sale or exchange; or • . . . otherwise dealing with them . . . preliminary to their sale or exchange.

  26. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case Bailee perfected by possession Bailee surrenders possession Deadline to perfect Now 20 days Bankruptcy • §9-312(f) A perfected security interest in a negotiable document or goods in the possession of a bailee . . . remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of • ultimate sale or exchange; or • . . . otherwise dealing with them . . . preliminary to their sale or exchange.

  27. Basic Concepts Temporary perfection/bankruptcy: Schwinn Cycling case Bailee perfected by possession Bailee surrenders possession Deadline to perfect Now 20 days Bankruptcy • §9-312(f) A perfected security interest in a negotiable document or goods in the possession of a bailee . . . remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of • ultimate sale or exchange; or • . . . otherwise dealing with them . . . preliminary to their sale or exchange. Bailee should have filed!

  28. Basic Concepts 9-210(b). [A] secured party . . . shall comply with a request within 14 days after receipt:

  29. Basic Concepts 9-210(b). [A] secured party . . . shall comply with a request within 14 days after receipt: (2) in the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.

  30. Basic Concepts Authenticated request with collateral list Authenticated approval or correction 14 days 9-210(b). [A] secured party . . . shall comply with a request within 14 days after receipt: (2) in the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.

  31. Basic Concepts Authenticated request with collateral list Authenticated approval or correction 14 days 9-210(b). [A] secured party . . . shall comply with a request within 14 days after receipt: (2) in the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction. This is the only (non-contract) obligation for secured to furnish information

  32. Basic Concepts Authenticated request with collateral list Authenticated approval or correction 14 days 9-210(b). [A] secured party . . . shall comply with a request within 14 days after receipt: (2) in the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction. This is the only (non-contract) obligation for secured to furnish information Only the debtor may make a request.

  33. Basic Concepts Authenticated request with collateral list Authenticated approval or correction 14 days 9-210(b). [A] secured party . . . shall comply with a request within 14 days after receipt: (2) in the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction. This is the only (non-contract) obligation for secured to furnish information Only the debtor may make a request. The debtor can request on behalf of the searcher.

  34. Problem 22.1, page 392 12/30/01 7/7/06 CS FS • Bank filed financing statement 12/30/01, continuation statement 7/7/06.

  35. Problem 22.1, page 392 12/30/01 7/7/06 CS FS • Bank filed financing statement 12/30/01, continuation statement 7/7/06. Was it timely?

  36. Problem 22.1, page 392 12/30/01 12/30/06 7/7/06 CS 5 years FS 6 mo. • Bank filed financing statement 12/30/01, continuation statement 7/7/06. Was it timely? Yes, in last six months, §9-515(d).

  37. Problem 22.1, page 392 12/30/01 12/30/06 7/7/06 3/22/10 CS Today 5 years FS 6 mo. • Bank filed financing statement 12/30/01, continuation statement 7/7/06. Was it timely? Yes, in last six months, §9-515(d).

  38. Problem 22.1, page 392 12/30/01 12/30/06 7/7/06 3/22/10 CS Today 5 years FS 6 mo. • Bank filed financing statement 12/30/01, continuation statement 7/7/06. Was it timely? Yes, in last six months, §9-515(d). • When is the next continuation statement due?

  39. Problem 22.1, page 392 12/30/01 12/30/06 12/30/11 7/7/06 6/30/11 3/22/10 CS CS 5 years 5 years FS 6 mo. 6 mo. • Bank filed financing statement 12/30/01, continuation statement 7/7/06. Was it timely? Yes, in last six months, §9-515(d). • When is the next continuation statement due? 6/30/11 to 12/30/11, §9-515(d)

  40. Problem 22.1, page 392 12/30/01 12/30/06 12/30/11 7/7/06 6/30/11 3/22/10 Bky CS CS 5 years 5 years FS 6 mo. 6 mo. • Bank filed financing statement 12/30/01, continuation statement 7/7/06. Was it timely? Yes, in last six months, §9-515(d). • When is the next continuation statement due? 6/30/11 to 12/30/11, §9-515(d) • Does a 3/29/10 bankruptcy change your advice? 

  41. Problem 22.1, page 392 c. Does bankruptcy change your advice (to file a continuation statement between 6/30/11 and 12/30/11)?

  42. Problem 22.1, page 392 c. Does bankruptcy change your advice (to file a continuation statement between 6/30/11 and 12/30/11)? §362(a)(4). [A] petition . . operates as a stay . . of . . any act to create, perfect or enforce any lien against property of the estate.

  43. Problem 22.1, page 392 c. Does bankruptcy change your advice (to file a continuation statement between 6/30/11 and 12/30/11)? §362(a)(4). [A] petition . . operates as a stay . . of . . any act to create, perfect or enforce any lien against property of the estate. §362(b)(3). The filing of a petition . . . does not operate as a stay . . . of any act to perfect, or to maintain or continue the perfection . . . to the extent that the trustee’s rights . . . are subject to such perfection under section 546(b) . . .

  44. Problem 22.1, page 392 c. Does bankruptcy change your advice (to file a continuation statement between 6/30/11 and 12/30/11)? §362(a)(4). [A] petition . . operates as a stay . . of . . any act to create, perfect or enforce any lien against property of the estate. §362(b)(3). The filing of a petition . . . does not operate as a stay . . . of any act to perfect, or to maintain or continue the perfection . . . to the extent that the trustee’s rights . . . are subject to such perfection under section 546(b) . . . §546(b)(1)(B). The rights . . . of a trustee . . . are subject to any generally applicable law that . . . provides for the . . . continuation of perfection of an interest in property to be effective against an entity that acquires rights . . . before the date on which action is taken to effect such . . . continuation.

  45. Problem 22.1, page 392 c. Does bankruptcy change your advice (to file a continuation statement between 6/30/11 and 12/30/11)? No §362(a)(4). [A] petition . . operates as a stay . . of . . any act to create, perfect or enforce any lien against property of the estate. §362(b)(3). The filing of a petition . . . does not operate as a stay . . . of any act to perfect, or to maintain or continue the perfection . . . to the extent that the trustee’s rights . . . are subject to such perfection under section 546(b) . . . §546(b)(1)(B). The rights . . . of a trustee . . . are subject to any generally applicable law that . . . provides for the . . . continuation of perfection of an interest in property to be effective against an entity that acquires rights . . . before the date on which action is taken to effect such . . . continuation.

  46. Problem 22.2, page 392 Now Note due 5 years FS No continuation statement was filed.

  47. Problem 22.2, page 392 Now Was continuation our job or the client’s job? Note due 5 years FS No continuation statement was filed.

  48. Problem 22.2, page 392 Now Was continuation our job or the client’s job? Note due 5 years FS No continuation statement was filed. Barnes v. Turner, 606 S.E. 2d 849 (Ga. 2004).

  49. Problem 22.2, page 392 Now Was continuation our job or the client’s job? Note due 5 years FS No continuation statement was filed. Barnes v. Turner, 606 S.E. 2d 849 (Ga. 2004). We do not, as the dissent contends, demand that the lawyer “ascertain the full extent of the client's 'objectives;’ only that the lawyer take reasonable, legal steps to fulfill the client's main, known objective -- to be paid for the business he sold. . . .”

  50. Problem 22.2, page 392 Now Note due 5 years FS • No continuation statement was filed. • 1. Should we file a continuation statement now?

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