Secured Transactions

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Secured Transactions

• Professor Guttentag
• Spring 2006

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For Today

• Administrative Details
• Course Overview
• Remedies for Unsecured Creditors Under State Law

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Administrative Details

• Syllabus
• Participation
• Attendance
• Electronic Poling
• Number assigned
• Bankruptcy?

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What are secured transactions?
Lisa promises to repay loan

• Creditor

Debtor
Burns lends 10 to Lisa
Lisa grants Burns a security interest
Collateral
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Secured transactions covered in this class

• Article 9 of the Uniform Comm. Code
• Adopted in all states
• Effective as of July 1, 2001
• Secured interests covered by UCC
• An interest in personal property or fixtures
  which secures payment or performance of an
  obligation. 1-201(37) R1-201(b)(35).

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Issues we will cover Part One

• Why bother with a security interest? Foreclosure

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Secured Transactions Key Terms

• Foreclosure
• If the debt is not paid when due, the secured
  creditor can require that the property be sold
  and the proceeds applied to payment.
• A relationship between an asset and a debt.

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Issues we will cover Part One

• Why bother with a security interest? Foreclosure
• How do you create a security interest?
  Attachment, Security Agreement

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Secured Transactions Key Terms

• Attachment
• The point in time at which the secured creditors
  security interest becomes enforceable against the
  debtor. 9.203 (a).
• Security Agreement
• The document in which the debtor grants the
  security interest to the secured creditor.

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Issues we will cover Part One

• Why bother with a security interest? Foreclosure
• How do you create a security interest?
  Attachment, Security Agreement
• What can a security interest cover?

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Issues we will coverPart Two
Lisa promises to repay loan
Debtor

• Creditor

Burns lends to Lisa
Lisa grants Burns a security interest
Burns gives public notice of security interest
Collateral
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Issues we will cover Part Two

• How do you give notice of a security interest in
  personal property? Perfection

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Secured Transactions Key Terms

• Perfection
• The point in time at which the secured creditors
  security interest becomes enforceable against
  third parties. 9.308 (a).
• Financing Statement
• Document filed at the appropriate public office
  that identifies debtor and collateral.
• Typically required for perfection. 9.310 (a).
• Other means of perfecting possession, control.

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Issues we will cover Part Two

• How do you give notice of a security interest in
  personal property? Perfection
• How do you maintain perfection?
• What do you get with perfection?

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Part 1 - Issue 1 Why bother with secured
interests?
Lisa promises to repay loan

• Creditor

Debtor
Burns lends to Lisa

• What happens without a security interest?