(1) the agreement complies with point 3 of paragraph (b) in respect of existing or subsequently acquired assets of the new debtor, to the extent that the assets are described in the agreement; and it must be understood that retrospectively acquired ownership clauses only do what they do. They cannot be used to create an enforceable security right in something that is not covered by the description of the original security right. If a creditor holds a security right in the debtor`s “existing and subsequently acquired equipment”, the subsequently acquired term does not confer on the lender an enforceable interest in the consumer goods or inventory subsequently acquired. Less obviously, under new section 9, the description of security rights as “general intangible assets” would not give the secured party an enforceable security right in lottery winnings won after the conclusion of the securities agreement, since, as discussed in Chapter 5 (Classification of Guarantees), lottery winnings fall under the definition of “account” in new section 9-102(a)(2). “A security right in investment property, deposit accounts, letters of credit or electronic furniture paper can be further developed by controlling the collateral.” Uniform Commercial Code, Articles 9 to 314. The “control” depends on the value of the guarantee. For example, if it is a current account, the bank where the deposit account is held has “control”: the bank automatically receives a security because, as stated in Official Commentary 3 to Article 9-104 of the UCC, “all actual and potential creditors of the debtor are always informed that the bank with which the debtor`s deposit account is held, may assert a claim on the deposit account”. The “control” of electronic movable paper in investment property and letters of credit is described in sections 9-105, 9-106 and 9-107. Obtaining “control” means that, given the manner in which the assets are held, the creditor has taken all necessary steps to put himself in a position to have the assets sold without further action by the owner.

Uniform Commercial Code, Articles 8 to 106, Official Commentary 1. According to former article 9 (306), paragraph 2, proceeds meant the assets that the debtor had received at the time of the sale of the security. New article 9-102(a)(64) removes such a requirement, specifying, for example, that if a security is sold from a debtor to a buyer and the buyer also sells the security, what the buyer receives constitutes proceeds. In order for the assets to be eligible for income under the new Article 9, it is sufficient that the assets can be returned directly or indirectly to the original guarantee. See the official 13d commentary on the new 9-102. Again, Figure 19.1 “The Hand That Enters” shows the seizure and shows the necessary elements: the creditor indicates the value, the debtor has rights in the security, and there is a security agreement signed by the debtor. If the debtor defaults, the creditor`s “hand” will seize (repossess) the security. (2) any other agreement is not required to make a security right in the property enforceable.

In your security agreement, you want the right to contact the debtor`s customer to receive direct payment. The security agreement set out in the Annexes contains these and other protection conditions. A creditor can search for financial statement records based on the debtor`s name or file number if they know it. As always, it is necessary to check certain definitions so that communication on the respective topic is possible. The secured transaction always includes a debtor, a secured party, a security agreement, a security right and a security interest. A law on fraud in Article 9 of the UCC requires that the security agreement be in writing. An exception to this requirement is when a security right is pledged. This happens when a borrower gives the lender the guarantee in exchange for a loan, for example when.

B`a person provides a pawnshop in exchange for a cash loan. Upon request at the point of acceptance, you can receive confirmation when the submission is complete. Each UCC record for identification is assigned a specific number and receives the requested confirmation. This number is called the file number. In addition, the date and time of submission are essential given the hierarchy of security rights by date. The field camp is more common. The satellite warehouse can take one of two forms. An independent company can go to the site and set up a temporary structure – for example, a fence around the copper – thus establishing physical control over the warranty. Or the independent company can rent the debtor`s storage facilities and put up signs indicating that the goods it contains are in its warehouse for sale. In any case, the goods are in the physical possession of the external warehouse service. The field camp then separates the goods that are secured for the respective bank or financial company and issues the lender with a storage receipt for those goods.

The lender is thus guaranteed a security right in the guarantee. A security right is generally established with a security agreement, which is a contract subject to Article 9 of the Uniform Commercial Code (UCC) as well as other state laws applicable to contracts. The UCC was adopted with some modifications by each state as well as by the District of Columbia, Guam and the U.S. Virgin Islands. If there is no agreement on the securities and the security right is not secured, but the transaction appears to be a transaction within the meaning of article 9, the court may recognize it as such by applying the compound document rule. The court will review a number of documents proving the security agreement and create an enforceable security right by reading the documents as a whole. However, the documents referred to in this Rule must be certified by the Parties; If this proves impossible, the security agreement fails. As mentioned earlier, a bank or other secured lender often has a lump sum UCC-1 that gives it a principal interest in all of the debtor`s assets and products. However, there is a way to secure goods and products before they are shipped. This is done through a purchase-money security right (PMSI). A PMSI grants the commercial creditor sold on credit a security right in the price of the goods sold.

Second Bank lends to Donald Debtor, who manages land in Pima County, Arizona. To secure the loan, the Second Bank takes a security right as collateral called “debtor`s farm equipment”. Donald then replaced a John Deere tractor that was in place at the time of the transfer of security to Second Bank with a new Ford tractor purchased by Selma Seller. Donald Debtor manufactures auto parts. Second Bank holds a security stake in Donald`s inventory of existing and purchased auto parts, and interest has been perfected over time. .