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Secured Transactions Assignment 18

Secured Transactions Assignment 18. Financing Statements: Other Information. The Big Picture. Part One: The Creditor-Debtor Relationship Part Two: The Creditor Third Party Relationship Chapter 6-7: Perfection Assignment 16: Filing Systems

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Secured Transactions Assignment 18

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  1. Secured TransactionsAssignment 18 Financing Statements: Other Information

  2. The Big Picture Part One: The Creditor-Debtor Relationship Part Two: The Creditor Third Party Relationship Chapter 6-7: Perfection Assignment 16: Filing Systems Assignment 17: Financing Statements: The Debtor’s Name Assignment 18: Financing Statements: Other Information Chapter 8-9: Priority

  3. The Big Picture Part One: The Creditor-Debtor Relationship Part Two: The Creditor Third Party Relationship Chapter 6-7: Perfection Assignment 16: Filing Systems Assignment 17: Financing Statements: The Debtor’s Name Assignment 18: Financing Statements: Other Information Chapter 8-9: Priority

  4. The Big Picture Part One: The Creditor-Debtor Relationship Part Two: The Creditor Third Party Relationship Chapter 6-7: Perfection Assignment 16: Filing Systems Assignment 17: Financing Statements: The Debtor’s Name Assignment 18: Financing Statements: Other Information Chapter 8-9: Priority

  5. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information To weed out the false positives: “Is this my debtor? Is this my collateral?” To make additional inquiry (of the secured party) So financing statement should contain eight more pieces of information

  6. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information To weed out the false positives: “Is this my debtor? Is this my collateral?” To make additional inquiry (of the secured party) So financing statement should contain eight more pieces of information

  7. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information To weed out the false positives: “Is this my debtor? Is this my collateral?” To make additional inquiry (of the secured party) So financing statement should contain eight more pieces of information

  8. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information To weed out the false positives: “Is this my debtor? Is this my collateral?” To make additional inquiry (of the secured party) So financing statement should contain eight more pieces of information

  9. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information. Is this filer ahead of me? To weed out the false positives: “Is this my debtor? Is this my collateral?” To make additional inquiry (of the secured party) So financing statement

  10. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information. Is this my debtor? (False positives)

  11. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information. Is this my debtor? (False positives) Is this my collateral?

  12. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information. Is this my debtor? (False positives) Is this my collateral? How do I find the secured creditor to ask?

  13. The Big Picture Theory of the filing system: First takers communicate their interests to later takers Problems: 1. They must be filing and searching in the same system 2. They must be filing and searching in the same name 3. Searcher may need more information. Is this my debtor? (False positives) Is this my collateral? How do I find the secured creditor to ask? So a financing statement should contain five more pieces of information

  14. What should be in a financing statement: • Name of the debtor • Name of the secured party 3. Indication of collateral 4. Mailing address of secured party 5. Mailing address of debtor 6. Individual or organization?

  15. What must be in a financing statement:1. To qualify for filing: §9-516(b) • Name of the debtor • Name of the secured party 3. Not an indication of collateral 4. Mailing address of secured party 5. Mailing address of debtor 6. Individual or organization?

  16. What must be in a financing statement:1. To qualify for filing: §9-516(b) • Name of the debtor • Name of the secured party 3. Not an indication of collateral 4. Mailing address of secured party 5. Mailing address of debtor 6. Individual or organization? These three items need not be correct

  17. What must be in a filed financing statement:2. Against a reliance purchaser: §9-506(a) • Name of the debtor; not seriously misleading, §9-502(a), 9-506(c) • Name of the secured party; can’t seriously mislead but might give rise to an estoppel, §9-506 Comment 2 3. Indication of collateral; not seriously misleading

  18. What must be in a filed financing statement:2. Against a reliance purchaser: §9-506(a) • Name of the debtor; not seriously misleading, §9-502(a), 9-506(c) • Name of the secured party;can’t seriously mislead but might give rise to an estoppel, §9-506 Comment 2 • Indication of collateral; not seriously misleading The totality of information included must not be seriously misleading, §9-506(a).)

  19. What must be in a filed financing statement:2. Against a reliance purchaser: §9-506(a) • Name of the debtor; not seriously misleading, §9-502(a), 9-506(c) • Name of the secured party;can’t seriously mislead but might give rise to an estoppel, §9-506 Comment 2 • Indication of collateral; not seriously misleading The totality of information included must not be seriously misleading, §9-506(a).) 4 - 6. The defective filer loses to purchasers who give value in reasonable reliance upon incorrect 9-516(b)(5) information. (Hardly anyone.)

  20. What must be in a filed financing statement:3. Against a bankruptcy trustee §9-506(a) • Name of the debtor; not seriously misleading, §9-502(a), 9-506(c) • Name of the secured party must be present but need not be right, §9-506 Comment 2 • Indication of collateral; not seriously misleading The totality of information included must not be seriously misleading, §9-506(a).) 4 - 6. The defective filer loses to no one.

  21. Terminology Initial financing statement – UCC-1, shown in §9-521(a), text at page 264

  22. Terminology Initial financing statement – UCC-1, shown in §9-521(a), text at page 264 Amendments – form at §9-521(b) Assignment: Transfers the secured party’s rights (optional) Continuation statement: Makes the financing statement effective for five more years Termination statement: Makes the financing statement ineffective. Party Information change: Changes to names and addresses

  23. Terminology Initial financing statement – UCC-1, shown in §9-521(a), text at page 264 Amendments – form at §9-521(b) Assignment: Transfers the secured party’s rights (optional) Continuation statement: Makes the financing statement effective for five more years Termination statement: Makes the financing statement ineffective. Party Information change: Changes to names and addresses Financing statement – The initial financing statement plus all amendments. §9-102(a)(39)

  24. Problem 18.1, page 324 You have to file the financing statement now, but don’t know the debtor’s address a. Leave the debtor’s address blank? Or fill in the address of the lot next door?

  25. Problem 18.1, page 324 You have to file the financing statement now, but don’t know the debtor’s address a. Leave the debtor’s address blank? Or fill in the address of the lot next door? Answer: the SOS will rightfully reject a blank filing, §9-516(b)(5)(C)(iii), but must accept an erroneous filing • You include the phony address and the SOS rejects. Are you perfected? Answer: §9-516(d). c. What if the SOS accepts?

  26. Problem 18.1, page 324 You have to file the financing statement now, but don’t know the debtor’s address a. Leave the debtor’s address blank? Or fill in the address of the lot next door? Answer: the SOS will rightfully reject a blank filing, §9-516(b)(5)(C)(iii), but must accept an erroneous filing • You include the phony address and the SOS rejects. Are you perfected? Answer: §9-516(d). c. What if the SOS accepts? Answer: You are at least lien-perfected. §9-520(c).

  27. Problem 18.2, page 324 We represent a trustee in bankruptcy We have the rights of a lien creditor who levied at bankruptcy, Bankruptcy Code §544 UCC §9-317(a). A security interest is subordinate to the rights of a person that becomes a lien creditor before the earlier of the time: • The security interest is perfected; or • [A security agreement is entered into] and a financing statement is filed Financing statement must be sufficient. §9-502

  28. Problem 18.3, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store

  29. Problem 18.3, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement? a. If Glacier Bank’s Security Agreement covers the Trimble Store and one of the financing statements was intended to, could Glacier be perfected?

  30. Problem 18.3, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement? a. If Glacier Bank’s Security Agreement covers the Trimble Store and one of the financing statements was intended to, could Glacier be perfected? Teel arguably? Pickle no.

  31. Problem 18.3, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement? a. If Glacier Bank’s Security Agreement covers the Trimble Store and one of the financing statements was intended to, could Glacier be perfected? Teel arguably? Pickle no. b. What should we do?

  32. Problem 18.3, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement? a. If Glacier Bank’s Security Agreement covers the Trimble Store and one of the financing statements was intended to, could Glacier be perfected? Teel arguably? Pickle no. b. What should we do? Call Glacier and ask?

  33. Problem 18.4, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement We represent Glacier Bank. We were supposed to have the Trimble store, but Trimble is not in our SA description.

  34. Problem 18.4, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement • We represent Glacier Bank. We were supposed to have the Trimble store, but Trimble is not in our SA description. • Smith’s lawyer calls. What should we say? Glacier Smith Us Lawyer

  35. Problem 18.4, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement • We represent Glacier Bank. We were supposed to have the Trimble store, but Trimble is not in our SA description. • Smith’s lawyer calls. What should we say? • Different if call is from another bank? §9-210. Glacier Smith Us Lawyer

  36. Problem 18.3, page 325 Smith has $26K judgment; sees these filed financing statements: Financing statement Financing statement Financing statement Financing statement Trimble store Security agreement? a. If Glacier Bank’s Security Agreement covers the Trimble Store and one of the financing statements was intended to, could Glacier be perfected? Teel arguably? Pickle no. b. What should we do? Call Glacier and ask? No. Levy or fold?

  37. Problem 18.5, page 325 Walter’s Department Store wants to file financing statements on thousands of consumer debtor customers.

  38. Problem 18.5, page 325 Walter’s Department Store wants to file financing statements on thousands of consumer debtor customers. • Does Walter’s need permission?

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