Professor Margit Livingston on Article 9 Security Interests in Deposit Accounts

In this Emerging Issues commentary, Professor Margit Livingston of DePaul University College of Law discusses the special problems under UCC Article 9 that's posed by security interests in deposit accounts. She references a 2009 Nebraska Supreme Court decision that reveals that depository banks that...

Putative Leases as Article 9 Secured Transactions

In most cases, filing a financing statement will protect the lessor/secured party from other secured parties. However, one type of transaction has bedeviled the courts for many years--the secured transaction disguised as a lease. Professor examines whether a corporation's possessory repairman's...

Debtor Name Changes under U.C.C. Article 9

Dealing with debtor name changes can be a tricky problem for secured parties. Only three pieces of information are required on a financing statement--the debtor's name, the name of the secured party or its representative, and an indication of the collateral. Sometimes debtors run amok, drastically...

Buyers in Ordinary Course of Business Under U.C.C. Article 9

The buyer in ordinary course of business ("BIOCOB"), usually takes free of even perfected security interests. In a recent federal district court case, the court tackled the issue of what it takes to be a BIOCOB in a situation where the buyer had not yet taken physical possession of the collateral...

Fixtures and Fixture Filings under U.C.C. Article 9

Professor Margit Livingston analyzes a recent bankruptcy case in which the court apparently misunderstood the distinction between chattel perfection and fixture filings. Professor Livingston writes: To perfect security interests under Article 9 of the Uniform Commercial Code, secured parties normally...

Article 9 Purchase Money Security Interests in Livestock

Under UCC Article 9, the priority scheme rewards the creditor who is first to give notice of its security interest. One of the few exceptions to the rule, however, is the superpriority afforded certain purchase money secured parties. This Emerging Issues Analysis addresses a case where the collateral...

2010 Amendments to Article 9: Debtor's Name on Financing Statements

Excerpt: The Uniform Commercial Code itself, scholarly articles, and judicial decisions have long emphasized the importance of the debtor's name on an Article 9 financing statement. The debtor's name is one of only three pieces of information absolutely required on a filed financing statement...

2010 Amendments to U.C.C. Article 9: Changes in the Debtor's Location

Excerpt: Generally, the law of the debtor's location governs perfection issues under Article 9 of the Uniform Commercial Code. In other words, the debtor's location controls the place of filing of financing statements giving notice of Article 9 security interests. U.C.C. § 9-301 (1) (Official...

Prioritizing Creditors: The Doctrine of Equitable Marshaling

Excerpt: Under Article 9 (Secured Transactions) of the Uniform Commercial Code, the default rule for priority among secured creditors is the first-to-file-or-perfect. U.C.C. § 9-322 (a)(1) (Official Text 2009). In other words, the secured party that first files a financing statement in the public...

Alternatives "A" and "B": Debtor Names Under Revised UCC Section 9-503

Failure to correctly identify a debtor on a financing statement can be fatal to a creditor's attempted filing of a security interest. Newly adopted amendments to Uniform Commercial Code Article 9 are designed to clear up some areas of confusion regarding how debtors' names appear on financing...

Article 9 Security Interests in Commercial Tort Claims

Security interests in commercial tort claims require special attention to ensure that they are properly created and perfected under UCC Article 9. This is demonstrated by two recent Court of Appeals decisions. Ultimately, both Courts of Appeal held that the secured party's security interest did...

UCC Article 9 Security Interests and Voidable Sales Contracts

Credit sellers of large-ticket items reserve security interests in the items sold to secure the buyer's payment of the purchase price. These creditors sometimes get off track by assuming that Article 9 does not apply to the transaction. In a recent Virginia Supreme Court decision, an automobile dealer...

The Ongoing Issue of the Debtor's Name on UCC Article 9 Financing Statements

There are any number of potential pitfalls along the way to properly setting up a secured transaction, but perhaps the most bedeviling stems from the failure to set forth the debtor's name correctly on the financing statement. As a recent bankruptcy court decision reveals, even sophisticated creditors...

The Uniform Commercial Code and the Transfer of Mortgage Notes

The Permanent Editorial Board for the U.C.C. recently issued a report explaining the Code provisions relevant to the transfer and enforcement of mortgage notes. This report highlights the particular provisions of Articles 3 and 9 that pertain to who can enforce promissory notes in real property transactions...

Professor Margit Livingston on Mishaps Involving a Termination Statement, a Correction Statement, and a Last-Minute Financing Statement Under U.C.C. Article 9

Although Article 9 of the Uniform Commercial Code has attempted to make perfection an easily attainable goal for secured parties, mistakes still occur, and many of them prove fatal to the secured creditor's perfected status. The secured party in a recent bankruptcy case found itself in danger of...

A New Twist on Debtor Names on U.C.C. Article 9 Financing Statements

Public filing of a financing statement is the common method of achieving perfection of a security interest. Article 9 is unforgiving towards debtor name errors because the debtor's name is the gateway to the filing system. A recent federal district court case reveals that more than a decade after...

U.C.C. Article 9 Security Interests in FCC Licenses

Where the debtor is radio or television station, often the most valuable collateral will be the station's FCC broadcast license. But FCC licenses pose special problems for secured parties because of the federal restrictions on assignments and transfers of them. In a recent case, the Tenth Circuit...

Professor Margit Livingston on U.C.C. Article 9 Security Interests under the Federal Food Security Act

The normally impregnable status of the senior perfected security party is justified by the need to facilitate the extension of secured credit at reasonable interest rates. But in the case of buyers in the ordinary course of business, the policies work differently. Excerpt: Generally, senior...

Professor Margit Livingston on Priority Between Accounts Financers and Lien Creditors Under U.C.C. Article 9

If a secured party properly perfects its security interest by filing a financing statement in the appropriate public office, it can normally be assured that it will prevail over a lien creditor (including the trustee in bankruptcy) in a fight over the debtor's accounts. In a recent bankruptcy...

Professor Margit Livingston on Article 9 Financing Statements: The Debtor's Name and the Transition Rules Under the 2010 Amendments

The debtor name issue has been a troublesome one for decades. Legislative and judicial attempts to grapple with it have not been entirely successful. Once again, the drafters are hoping that this latest round of amendments will finally resolve this key question and make the public record system even...

Article 9 Financing Statements: Debtor Name Changes under the 2010 Amendments

The 2010 Amendments to UCC Art. 9, effective July 1, 2013, do not make sweeping changes to the overall structure and rules of existing Article 9, but in a few key areas, the drafters have significantly altered the current statutory provisions to simplify and clarify the law. One of those areas involves...

You’re What You Own: Perfection of Security Interests in Investment Property

by Jamie Watkins Bruno Under Article 9 of the Uniform Commercial Code ("UCC"), a secured party perfects its security interest in investment property - such as certificated and uncertificated securities, securities accounts and commodity accounts - by acquiring "control" over...

Changes of the Debtor's Location under the 2010 Amendments to U.C.C. Article 9

The 2010 Amendments to Article 9 (Secured Transactions) of the Uniform Commercial Code modify or clarify certain key provisions of the statute. One of the provisions so modified involves changes of the debtor's location. The 2010 Amendments do not change provisions regarding the debtor's...

Professor Margit Livingston on Changes in a Debtor's Business Structure under U.C.C. Article 9

A secured party that perfects its security interest without flaw at the outset can lose its perfected status because of post-filing changes in the debtor's business structure. It is incumbent upon secured parties to keep track of such changes and to act swiftly to preserve perfection at all times...

Livingston on Unauthorized Filing of Termination Statements under U.C.C. Article 9

In a recent bankruptcy case, the secured creditors, to their horror, found that they erroneously allowed the debtor to file a termination statement although the debtor still owed millions of dollars on the associated transaction. A sympathetic court, however, applying traditional common law principles...