1. The University of Chicago
8/4/2019
Class 7 Secured Transactions, Fall, Perfection: Secured Party’s Name
Randal C. Picker
James Parker Hall Distinguished Service Professor of Law
The Law School
The University of Chicago
Copyright © Randal C. Picker. All Rights Reserved.

2. 9-502 (a) [Sufficiency of financing statement.]
8/4/2019
9-502
(a) [Sufficiency of financing statement.]
Subject to subsection (b), a financing statement is sufficient only if it:
(1) provides the name of the debtor;
(2) provides the name of the secured party or a representative of the secured party; and
(3) indicates the collateral covered by the financing statement.
August 4, 2019

3. 9-503: Name of Secured Party
8/4/2019
9-503: Name of Secured Party
(d) [Representative capacity.]
Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.
August 4, 2019

4. 9-503: Name of Secured Party
8/4/2019
9-503: Name of Secured Party
(e) [Multiple debtors and secured parties.]
A financing statement may provide the name of more than one debtor and the name of more than one secured party.
August 4, 2019

5. Copper King Copper King Trust Which SPs are perfected? Noonan
8/4/2019
Copper King
Noonan
Patterson
1/15/87: Copper King Files Ch 11
$62.5K
Which SPs are perfected? PN
1984
2/1/86
$100K
Copper
King
Trust
SA: Furn & EQ
FS: SPs: Noonan, Patterson
$225K in Debt
August 4, 2019

6. Organizing Bank Lending Groups
8/4/2019
Organizing Bank Lending Groups
Bank1
Debtor
1/1: SA/FS: All Assets $
Some time later, the Debtor would like to borrow more money. What are the options?
August 4, 2019

7. Lending Groups: Version 1
8/4/2019
TTYN
Lending Groups: Version 1
1/1: SA/FS: All Assets, $10K
Bank1
Debtor
2/16: SA/FS: All Assets, $10K
1/15: SA, FS: All Assets, $10K
Finco
Bank2
What are the priorities?
August 4, 2019

8. Answer Priorities Should be Clear Bank1 over Finco over Bank2
August 4, 2019

9. Lending Groups: Version 2
8/4/2019
TTYN
Lending Groups: Version 2
1/1: SA/FS: All Assets, $10K
Bank1
Debtor
2/16: Lends $10K
1/15: SA, FS: All Assets, $10K
2/15: Lends $10K
Finco
Bank2
What are the priorities?
August 4, 2019

10. Answer Priorities Should be Clear
Bank2 is a creditor of Bank1, not Debtor
Finco and Bank1 are both creditors of Debtor
Bank1 has priority over Finco, both for the 1/1 loan and the 2/16 loan
See on future advances
August 4, 2019

11. 3‑5: Secured Creditors and Agents
8/4/2019
TTYN
3‑5: Secured Creditors and Agents
Debtor
Has either secured creditor perfected?
1/1: $
1/1: $
3/1
FS: Holdco
Holdco SC SC
2/1 Appointed
Collateral Agent
August 4, 2019

12. 3-5: Answer See 9-503: Official Comment 3
8/4/2019
3-5: Answer
See 9-503: Official Comment 3
Debtor creates a security interest in favor of Bank X, Bank Y, and Bank Z, but not to their representative, the collateral agent (Bank A). The collateral agent is not itself a secured party. See Section
August 4, 2019

13. 8/4/2019
3-5: Answer
Under Sections 9-502(a) and 9-503(d), however, a financing statement is effective if it names as secured party Bank A and not the actual secured parties, even if it omits Bank A’s representative capacity.
August 4, 2019

14. Lending Groups: Version 3
8/4/2019
TTYN
Lending Groups: Version 3
1/1: SA/FS: All Assets
Agent
Debtor
2/15: Lends $ per Agent
1/15: SA, FS: All Assets, $
1/1: Lends $ per Agent
Finco
Bank1
Bank2
August 4, 2019
What are the priorities?

15. Answer Priorities Should be Clear Agent is not a creditor of Debtor
Bank1 and Bank2 will be able to claim priority over Finco
Bank1 and Bank2 will be at the same priority as to each other
August 4, 2019

16. 2001 SA between Oak Rock and IDB
Collateral Definition
“the following properties, assets and rights of the [Debtor], wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being hereinafter called the ‘Collateral’)”:
August 4, 2019

17. 2001 SA between Oak Rock and IDB
Collateral Definition
“all personal and fixture property of every kind and nature including, without limitation, all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents, accounts (including healthcare insurance receivables), chattel paper (whether tangible or electronic),
August 4, 2019

18. 2001 SA between Oak Rock and IDB
Collateral Definition
“deposit accounts (whether or not maintained at the Bank), letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, financial assets, securities and all other investment property, supporting obligations, any other contract rights or rights to
August 4, 2019

19. 2001 SA between Oak Rock and IDB
Collateral Definition
“the payment of money, insurance claims and proceeds, tort claims and all general intangibles, including, without limitation, all tax refunds, payment intangibles …”
August 4, 2019

20. 2001 FS as to Oak Rock in favor of IDB
July 31, 2001 Delaware
“All of Debtor’s now owned and hereafter acquired assets, including without limitation all accounts, goods, inventory, equipment, instruments, documents, chattel paper, deposit accounts, letter of credit rights, commercial tort claims, financial assets, securities, and all other investment
August 4, 2019

21. 2001 FS as to Oak Rock in favor of IDB
July 31, 2001 Delaware
“property, general intangibles and all supporting obligations and products and proceeds of the foregoing.”
August 4, 2019

22. The Effect of a Filed FS 9-502, Comment 2
“Notice filing has proved to be of great use in financing transactions involving inventory, accounts, and chattel paper, because it obviates the necessity of refiling on each of a series of transactions in a continuing arrangement under which the collateral changes from day to day.”
August 4, 2019

23. The Effect of a Filed FS 9-502, Comment 2
“However, even in the case of filings that do not necessarily involve a series of transactions (e.g., a loan secured by a single item of equipment), a financing statement is effective to encompass transactions under a security agreement not in existence and not contemplated at the time the notice was filed,”
August 4, 2019

24. The Effect of a Filed FS 9-502, Comment 2
“if the indication of collateral in the financing statement is sufficient to cover the collateral concerned.”
August 4, 2019

25. The Effect of a Filed FS 9-502, Comment 2
“Similarly, a financing statement is effective to cover after-acquired property of the type indicated and to perfect with respect to future advances under security agreements,”
August 4, 2019

26. The Effect of a Filed FS 9-502, Comment 2
“regardless of whether after-acquired property or future advances are mentioned in the financing statement and even if not in the contemplation of the parties at the time the financing statement was authorized to be filed.”
August 4, 2019

27. ??? (auto perfected sales)
8/4/2019
Oak Rock Financial
2001: SA/FS: All Assets, $
IDB
Debtor
Agent
2006: UCC Assignment
??? (auto perfected sales)
2006: Lends $
IDB BL
2006: Lends $
Participants
What are the priorities?
August 4, 2019

28. Answer The Effect of the Assignment
The only real difference here vs. before is the assignment between IDB and Agent IDB
August 4, 2019

29. 9-514 on Assignment
9-514(b)
Except as otherwise provided in subsection (c), a secured party of record may assign of record all or part of its power to authorize an amendment to a financing statement by filing in the filing office an amendment of the financing statement which:
August 4, 2019

30. 9-514 on Assignment
9-514(b)
(1) identifies, by its file number, the initial financing statement to which it relates;
(2) provides the name of the assignor; and
(3) provides the name and mailing address of the assignee.
August 4, 2019

31. 9-514 Comments Consequence of Assignment
“Upon the filing of an assignment, the assignee becomes the ‘secured party of record’ and may authorize the filing of a continuation statement, termination statement, or other amendment.”
August 4, 2019

32. 9-512(c) on Amendments and Adding Collateral
A financing statement that is amended by an amendment that adds collateral is effective as to the added collateral only from the date of the filing of the amendment.
August 4, 2019

33. 3-6: When Is Agency Determined?
8/4/2019
TTYN
3-6: When Is Agency Determined?
Debtor
2/15: SA, FS: EQ
$10K
Finco
4/15 How split EQ worth $20K?
2/1: $10K
SA: EQ, for all debts owed N and HA
FS: EQ, SP: Bank
3/5: SA, FS: EQ
$10K
4/5: Bank agrees to act as Creditco’s collateral agent
Creditco
Bank
August 4, 2019

34. Answer
Conflict?
Compare Oak Rock Financial with Fretz (we haven’t seen this yet)
August 4, 2019