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Secured Transactions Assignment 3

Secured Transactions Assignment 3. Repossession of Collateral. Chapter 1: Creditors’ Remedies Under State Law. Assignment 1: Remedies of Unsecured Creditors Assignment 2: Security and Foreclosure: title Assignment 3: Repossession: possession ***************************

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Secured Transactions Assignment 3

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  1. Secured TransactionsAssignment 3 Repossession of Collateral

  2. Chapter 1: Creditors’ Remedies Under State Law Assignment 1: Remedies of Unsecured Creditors Assignment 2: Security and Foreclosure: title Assignment 3: Repossession: possession *************************** Title and possession are independent Foreclosure without repossession: Davet, p. 31 Repossession without foreclosure: Assignment 5

  3. Chapter 1: Creditors’ Remedies Under State Law Assignment 1: Remedies of Unsecured Creditors Assignment 2: Security and Foreclosure: title Assignment 3: Repossession: possession *************************** Title and possession are independent Foreclosure without repossession: Davet, p. 31 Repossession without foreclosure: Assignment 5

  4. Chapter 1: Creditors’ Remedies Under State Law Assignment 1: Remedies of Unsecured Creditors Assignment 2: Security and Foreclosure: title (can occur without repossession – writ of assistance)

  5. Chapter 1: Creditors’ Remedies Under State Law Assignment 1: Remedies of Unsecured Creditors Assignment 2: Security and Foreclosure: title (can occur without repossession – writ of assistance) Assignment 3: Repossession: possession

  6. Chapter 1: Creditors’ Remedies Under State Law Assignment 1: Remedies of Unsecured Creditors Assignment 2: Security and Foreclosure: title (can occur without repossession – writ of assistance) Assignment 3: Repossession: possession (can occur without foreclosure – cases in this assignment)

  7. Basic Concepts: Repossession 1. Replevin 2. Self help 3. Receiver 4. Breach of the peace 5. Trespass 6. Privilege to trespass 7. Concealment

  8. Basic Concepts: Repossession Replevin: A cause of action (writ) for possession

  9. Basic Concepts: Repossession Replevin: A cause of action (writ) for possession 1. Secured party has right to possession UCC § 9-609

  10. Basic Concepts: Repossession Replevin: A cause of action (writ) for possession 1. Secured party has right to possession UCC § 9-609 2. Powerful: sheriff delivers temporary possession early

  11. Basic Concepts: Repossession Replevin: A cause of action (writ) for possession 1. Secured party has right to possession UCC § 9-609 2. Powerful: sheriff delivers temporary possession early 3. Two procedures both Constitutional:

  12. Basic Concepts: Repossession Replevin: A cause of action (writ) for possession 1. Secured party has right to possession UCC § 9-609 2. Powerful: sheriff delivers temporary possession early 3. Two procedures both Constitutional: Notice Hearing 10-20 days Default Complaint Writ Levy

  13. Basic Concepts: Repossession Replevin: A cause of action (writ) for possession 1. Secured party has right to possession UCC § 9-609 2. Powerful: sheriff delivers temporary possession early 3. Two procedures both Constitutional: Notice Hearing 10-20 days Default Complaint Writ Levy “Immediate” post-hearing Ex parte hearing Notice 10-20 days Default Complaint Writ Levy

  14. Basic Concepts: Repossession

  15. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy)

  16. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance

  17. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance • Article 9 standard: “Tending to provoke others to break the peace,” Callaway v. Whittenton Trespass • Criminal standard: “after warning” • Civil: Entry on land without express or implied authority Privilege (to trespass): An entry to repossess is privileged if “there [is] no confrontation and the timing and manner, including notice or lack of notice, are found reasonable.” Concealment: "Whoever . . . conceals any personal property in which he knows another has a security interest . . . is guilty of a Class E felony" Wis. Stat. §943.25

  18. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance • Article 9 standard: “Tending to provoke others to break the peace,” Callaway v. Whittenton Trespass • Criminal standard: “after warning” • Civil: Entry on land without express or implied authority Privilege (to trespass): An entry to repossess is privileged if “there [is] no confrontation and the timing and manner, including notice or lack of notice, are found reasonable.” Concealment: "Whoever . . . conceals any personal property in which he knows another has a security interest . . . is guilty of a Class E felony" Wis. Stat. §943.25

  19. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance • Article 9 standard: “Tending to provoke others to break the peace,” Callaway v. Whittenton Trespass • Criminal standard: fenced, posted, “after warning” • Civil: Entry on land without express or implied authority Privilege (to trespass): An entry to repossess is privileged if “there [is] no confrontation and the timing and manner, including notice or lack of notice, are found reasonable.” Concealment: "Whoever . . . conceals any personal property in which he knows another has a security interest . . . is guilty of a Class E felony" Wis. Stat. §943.25

  20. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance • Article 9 standard: “Tending to provoke others to break the peace,” Callaway v. Whittenton Trespass • Criminal standard: fenced, posted, “after warning” • Civil: Intentional entry on land without authority Privilege (to trespass): An entry to repossess is privileged if “there [is] no confrontation and the timing and manner, including notice or lack of notice, are found reasonable.” Concealment: "Whoever . . . conceals any personal property in which he knows another has a security interest . . . is guilty of a Class E felony" Wis. Stat. §943.25

  21. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance • Article 9 standard: “Tending to provoke others to break the peace,” Callaway v. Whittenton Trespass • Criminal standard: fenced, posted, “after warning” • Civil: Intentional entry on land without authority Privilege (to trespass): An entry to repossess is privileged if “there [is] no confrontation and the timing and manner, including notice or lack of notice, are found reasonable.” Concealment: "Whoever . . . conceals any personal property in which he knows another has a security interest . . . is guilty of a Class E felony" Wis. Stat. §943.25

  22. Basic Concepts: Repossession Breach of the peace (limits self help, not sheriff levy) • Criminal standard: Public disturbance • Article 9 standard: “Tending to provoke others to break the peace,” Callaway v. Whittenton Trespass • Criminal standard: fenced, posted, “after warning” • Civil: Intentional entry on land without authority Privilege (to trespass): An entry to repossess is privileged if “there [is] no confrontation and the timing and manner, including notice or lack of notice, are found reasonable.” Concealment: "Whoever . . . conceals any personal property in which he knows another has a security interest . . . is guilty of a Class E felony" Wis. Stat. §943.25

  23. Basic Concepts: Repossession Receiver: An officer of the court who takes possession of collateral during foreclosure to preserve it California: Receiver gets possession if: 1. Property in danger of loss, removal, injury or 2. Debtor in default and value of collateral less than amount of the debt Illinois: Mortgagee gets possession if: 1. Non-residential real property 2. Provision in the mortgage and 3. Probability mortgagee will prevail Unless good cause

  24. Creditors don’t get possession by foreclosure; purchasers do

  25. Problem 3.1,page 54 Problem 1.3 Our advice: Jeff can’t use self help. Problem 3.1. What if Jeff is secured? What policy justifies the difference? Lisa Jeff $1K Loan

  26. Problem 3.2,page 54 How do we repossess?

  27. Problem 3.2,page 54 How do we repossess? Owner

  28. Problem 3.2,page 54 How do we repossess? Owner Contract Contractor

  29. Problem 3.2,page 54 How do we repossess? Owner Contract Contractor Contract Subcontractor

  30. Problem 3.2,page 54 How do we repossess? Owner Contract Contractor Rights in the collateral (ownership) Contract Subcontractor

  31. Problem 3.2,page 54 How do we repossess? • No guard, no fence

  32. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day?

  33. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass?

  34. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice?

  35. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects?

  36. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions?

  37. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard

  38. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass?

  39. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock?

  40. Problem 3.2,page 54 How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock? • Pick, tension wrench?

  41. Problem 3.2,page 54 • How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock? • Pick, tension wrench? c. Guard and fence

  42. Problem 3.2,page 54 • How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock? • Pick, tension wrench? c. Guard and fence What happens if we ask for the dozer?

  43. Problem 3.2,page 54 • How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock? • Pick, tension wrench? c. Guard and fence What happens if we ask for the dozer? What if we defraud?

  44. Problem 3.2,page 54 • How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock? • Pick, tension wrench? c. Guard and fence What happens if we ask for the dozer? What if we defraud? d. In debtor’s steel building

  45. Problem 3.2,page 54 • How do we repossess? • No guard, no fence • Time of day? • OK to trespass? • Give prior notice? • If someone objects? • Instructions? • Fence, but no guard • OK to trespass? • Cut the lock? • Pick, tension wrench? c. Guard and fence What happens if we ask for the dozer? What if we defraud? d. In debtor’s steel building Pick the lock?

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