Transcript Document 7353288

Final Exam
70 multiple choice questions, 3 hours
Pick best answer. May explain answers if you wish (but don’t
have to).
Open book, open note, no computers!
3 points for correct answer, -1 for answers incorrectly marked,
0 for answers left blank. It makes sense to guess if you can
narrow to 3 or fewer choices
Canons of Statutory Interpretation – Karl Llewellyn, Remarks
On Theory of Appellate Decisions, 3 Vand. L. Rev. 365 (1950)
- Construe according to plain meaning: Check definitions in
Articles 1 & 9
- Construe to avoid surplus language: Every word should have
some meaning
- Construe according to intent of drafters: See official
comments
- Construe in accord with overall policy: See Rev. 1-103
Lease or Security Interest? Revised 1-203
Sale: Parties contemplate title passing to buyer,
no reversionary interest for seller.
Lease: Parties contemplate reversionary interest for lessor.
Is the transaction excluded from Article 9 (wholly or partially)?
- statutory preemption 9-109(c)
- excluded by Article 9 9-109(d)
Complete Legal Name
Name on Financing Statement
Michael A. Erwin
Mike Erwin
Terrance Joseph Kinderknecht
Terry J. Kinderknecht
Rodger House
Roger House
12/31/98 – B of A files f.s. listing debtors as “Ronald and
Trenna Grabowski” at 12047 State Highwa;y #37, Benton, Illinois
62812 [address of their farm equipment business, not their farm].
Collateral is described as “all … equipment”
1/18/2000 – South Pointe Bank files f.s. listing debtors as
“Ronald and Trenna Grabowski” at P.O. Box 38, Dubois, Illinois
62831. Collateral described as JD 925 Flex Platform …
JD 4630 Tractor…,JD 630 Disk 28’ 1998
Collateral Descriptions
Security Agreement – 9-108 & 9-203
Financing Statement – 9-108 & 9-502, comment 2 & 9-504
Bogus Filings
1) Debtor is authorized to file termination statement if s.p.
wrongfully refuses to file one. Must state that it is filed by
Debtor. 9-509(d).
2) Debtor may file correction statement. 9-518
3) In any event, financing statement remains on file until 1
year after lapse. 9-519(g).
4) Debtor may sue wrongful filer for damages. 9-625
5) Debtor may seek to clear title or seek criminal prosecution
outside of Article 9. 9-518, comment 3.
Choice of law for perfection – which state’s law governs
questions of perfection, effect of perfection & priority?
1) Is transaction described in 9-302 – 9-306? If so, use rules
from the appropriate section.
2) Otherwise, use 9-301.
3) Other choice of law issues – Former UCC 1-105
Where is the debtor located? 9-307
Individual – principal residence
U.S. reg. organization (e.g. corporation organized under
Delaware law) – state of organization
Other organization – place of business, if more than one
place of business, chief executive office
If location outside U.S. – foreign jurisdiction only if it has
filing system, otherwise D.C.
PMSP vs. Non-PMSP
Rule for goods other than inventory and livestock that are
farm products – pmsp wins if files w/in 20 days after debtor
receives possession of the goods
PMSP vs. gap lien creditor
PMSP wins if files w/in 20 days after debtor receives collateral
9-317(e)
Perfection by control –
Mandatory: deposit account & letter of credit right (exception
Under 9-308(d)). 9-312(b)
Permissive: investment property, electronic chattel paper &
electronic documents of title. 9-314
How to take control: 9-104 – 9-107
Special priority rules for deposit accounts, investment property
and letter of credit rights: 9-327 – 9-329
Food Security Act – 7 USC 1631
Normal rule: biocob & commission merchants (e.g.
auctioneers) take free of security interests in farm products
(reverses UCC rule)
Exceptions (must pay off s.p. to take free):
- biocob or commission merchant receive specified notice of
security interest w/in 1 year before purchase (seller is required
to give secured party a list of buyers and commission
Merchants)
-state establishes filing system pursuant to which buyers
register, special financing statements are filed by s.p., and
buyer receives list of secured parties who are financing
debtor
S.p. vs. lessee of collateral – 2A-307 & 9-321
Lessor vs. s.p. of lessee – 2A-307
S.p. vs. Buyer of collateral w/Art. 2 s.i. – 2-711(3), 9-110
Unpaid Seller vs. secured party of buyer – 2-403, 2-702
Holder of statutory lien vs. s.p. – 9-109(d)(2), 9-333
Priorities regarding accessions & commingled goods – 9-335
& 9-336
Secured parties vs. U.S. government – general priority
Statute, 31 usc 3713, tax liens, 26 usc 6323
Plymouth Savings Bank v. IRS –
9/22/93 – SP filed financing statement
4/13/94 – S.i. created in assets in question
12/19/94 – First tax lien filed for FICA liability
2/14/95 – Second tax lien filed for FICA liability
3/31/95 – Debtor contracts with hospital to help it obtain
state license. $75,000 to be paid 2 years after license
obtained.
5/15/95 – Hospital obtains license (debtor sold her license
to hospital). $75,000 yet unpaid.
Secured party vs. bankruptcy trustee
- “strong arm” provision of BC 544
- ability to avoid preferences under BC 547
- ability to avoid fraudulent transfers under BC 548
Problem 100
4/17 – Security interest created
4/18 – D files for bankruptcy
4/18 (1 hour later) – F.S. filed
Problem 102
11/1 – PNB loans Kermit $1,000 for banjo, Kermit
signs s.a. (PMSI)
11/15 – Kermit buys banjo
12/5 – PNB files f.s.
12/6 – Kermit files for bankruptcy
R & J of Tennessee, Inc. v. Blankenship-Melton Real Estate –
2/23/2000 – Loan of $40,000 made by Bank of Hendersonville
to Blankenship Melton secured by various items of collateral.
Blankenship signs guaranty agreement at same time.
11/6/2001 – R & J (through Johnny Melton), purchases the note
from the bank for $26,455.39. Debtor was already in default.
6/11/2002 – Notice sent to Blankenship indicating collateral
would be sold at public sale on 6/21. Notice sent to address
on promissory note.
6/21/2002 – Collateral sold. Only Johnny and Larry Melton
present. Only Johnny bid on the collateral.
6/28/2002 – Notice to Blankenship returned to R & J.
Coxall –
Cash price = $8100
Time/price differential = $1036.24
Repossession sale price = $1500
Deficiency amount claimed = $4998.09
Amt. due when repossession occurred = $1101.15
Strict Foreclosure under UCC 9-620
1) Debtor must consent by signing off or not responding
to notice w/in 20 days after notice is sent. Must sign off on
partial strict foreclosure (non-consumer goods cases).
2) SP’s of record as of 10 days before debtor’s consent must
be given notice of proposed strict foreclosure. Secondary
Obligors entitled to notice of partial strict foreclosure.
3) Persons entitled to notice must not object w/in 20 days after
notice is sent to them. Others w/subordinate interests in
collateral must not object w/in period set forth in 9-620(d).
4) If collateral is consumer goods, s.p. must be in possession
at time of consent. Mandatory disposition under 9-620(e)(may
be waived after default under 9-624(b)).