Secured Transactions Assignment 23 Maintaining Perfection Through Changes

Secured Transactions Assignment 23 Maintaining Perfection Through Changes of Name, Identity, and Use 1

The Big Picture Part Two: The Creditor Third Party Relationship Chapter 6: Perfection Chapter 7: Maintaining Perfection Assignment 22: Through lapse and bankruptcy Assignment 23: Through changes in name, identity and use of collateral Assignment 24: Through interstate movements of debtors and collateral Chapter 8 -9: Priority 2

The Big Picture Part Two: The Creditor Third Party Relationship Chapter 6: Perfection Chapter 7: Maintaining Perfection Assignment 22: Through lapse and bankruptcy Assignment 23: Through changes in name, identity and use of collateral Assignment 24: Through interstate movements of debtors and collateral Chapter 8 -9: Priority 3

Perfection-maintenance Problem S 1 Filing Debtor’s name Collateral description 4

Perfection-maintenance Problem S 1 Filing Changes Debtor’s name Collateral description Name change Sale to new owner Collateral transformed Change of use Proceeds exchange New debtor 5

Perfection-maintenance Problem S 1 Filing S 2 Search Changes Debtor’s name Collateral description Name change Sale to new owner Collateral transformed Change of use Proceeds exchange New debtor New name New owner Different description 6

Perfection-maintenance Problem S 1 Filing S 2 Search Changes Debtor’s name Collateral description Name change Sale to new owner Collateral transformed Change of use Proceeds exchange New debtor New name New owner Different description Two approaches mixed: 7

Perfection-maintenance Problem S 1 Filing S 2 Search Changes Debtor’s name Collateral description Name change Sale to new owner Collateral transformed Change of use Proceeds exchange New debtor New name New owner Different description Two approaches mixed: 1. Filer updates the filings as changes occur 8

Perfection-maintenance Problem S 1 Filing S 2 Search Changes Debtor’s name Collateral description Name change Sale to new owner Collateral transformed Change of use Proceeds exchange New debtor New name New owner Different description Two approaches mixed: 1. Filer updates the filings as changes occur 2. Searcher must discover history of name and description 9

Name Changes, § 9 -507(c) Filing 10

Name Changes, § 9 -507(c) Filing A seriously misleading name change creates a four-month window. 11

Name Changes, § 9 -507(c) Filing Seriously misleading name change 4 months A seriously misleading name change creates a four-month window. 12

Name Changes, § 9 -507(c) Filing Seriously misleading name change Amendment 4 months A seriously misleading name change creates a four-month window. If filer amends within four months, filing is valid for all collateral 13

Name Changes, § 9 -507(c) Filing Seriously misleading name change Amendment 4 months If collateral is acquired this date A seriously misleading name change creates a four-month window. If filer amends within four months, filing is valid for all collateral 14

Name Changes, § 9 -507(c) Filing Seriously misleading name change Now 4 months If collateral is acquired this date A seriously misleading name change creates a four-month window. If filer amends within four months, filing is valid for all collateral If filer does not amend within four months, filing is valid against collateral acquired before the end of four months 15

Name Changes, § 9 -507(c) Filing Seriously misleading name change Now 4 months If collateral is acquired this date A seriously misleading name change creates a four-month window. If filer amends within four months, filing is valid for all collateral If filer does not amend within four months, filing is valid against collateral acquired before the end of four months 16

Name Changes, § 9 -507(c) Filing Seriously misleading name change Amendment 4 months If collateral is acquired this date If acquired this date A seriously misleading name change creates a four-month window. If filer amends within four months, filing is valid for all collateral If filer does not amend within four months, filing is valid against collateral acquired before the end of four months If filer amends late, amendment is effective, Comment 4. but priority is only from the Amendment 17

Change in owner (debtor), § 9 -507(a) S 1 files against Sam Seller 18

Change in owner (debtor), § 9 -507(a) S 1 files against Sam Seller Sam sells the collateral to Beth Buyer 19

Change in owner (debtor), § 9 -507(a) S 1 files against Sam Seller Sam sells the collateral to Beth Buyer “A filed financing statement remains effective with respect to collateral that is sold. . . even if the secured party knows of. . . the disposition. ” 20

Change in owner (debtor), § 9 -507(a) S 1 files against Sam Seller Sam sells the collateral to Beth Buyer borrows from S 2 “A filed financing statement remains effective with respect to collateral that is sold. . . even if the secured party knows of. . . the disposition. ” S 1 filing is effective. How would S 2 find it? 21

Change in owner (debtor), § 9 -507(a) S 1 files against Sam Seller Sam sells the collateral to Beth Buyer borrows from S 2 “A filed financing statement remains effective with respect to collateral that is sold. . . even if the secured party knows of. . . the disposition. ” S 1 filing is effective. How would S 2 find it? Comment 3. “[A]ny person seeking to determine whether a debtor owns collateral free of security interests must inquire as to the debtor’s source of title and, if circumstances seem to require it, search in the name of a former owner. ” 22

Change in owner (debtor), § 9 -507(a) S 1 files against Sam Seller Sam sells the collateral to Beth Buyer borrows from S 2 “A filed financing statement remains effective with respect to collateral that is sold. . . even if the secured party knows of. . . the disposition. ” S 1 filing is effective. How would S 2 find it? Comment 3. “[A]ny person seeking to determine whether a debtor owns collateral free of Every searcher must inquire as to the debtor’s source of title and, if circumstances seem to require it, search in the name of a former owner. ” 23

Changes in collateral: Physical/use Filing Physical/use change in collateral Search 24

Changes in collateral: Physical/use Filing Physical/use change in collateral Search § 9 -507(b). A financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9 -506. 25

Changes in collateral: Physical/use Filing Physical/use change in collateral Search § 9 -507(b). A financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9 -506. The financing statement remains effective 26

Changes in collateral: Physical/use Filing Physical/use change in collateral Search § 9 -507(b). A financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9 -506. The financing statement remains effective The secured party may not remain perfected. E. g. , auto parts become an auto; auto use changed from equipment to inventory. 27

Changes in collateral: Proceeds Filing Collateral exchanged for proceeds Search 28

Changes in collateral: Proceeds Filing Collateral exchanged for proceeds Search Three kinds of changes: 29

Changes in collateral: Proceeds Filing Collateral exchanged for proceeds Search Three kinds of changes: Type 0: The description still indicates the collateral (No change) 30

Changes in collateral: Proceeds Filing Collateral exchanged for proceeds Search Three kinds of changes: Type 0: The description still indicates the collateral (No change) Type 1: The description is seriously misleading, but the filing is in the right office for the new collateral. 31

Changes in collateral: Proceeds Filing Collateral exchanged for proceeds Search Three kinds of changes: Type 0: The description still indicates the collateral (No change) Type 1: The description is seriously misleading, but the filing is in the right office for the new collateral. Type 2: The filing is in the wrong office for the new collateral 32

Changes in collateral: Proceeds 9 -315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. 33

Changes in collateral: Proceeds 9 -315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. (d) A perfected security interest in proceeds becomes unperfected on the 21 st day after [attachment] unless 34

Changes in collateral: Proceeds 9 -315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. (d) A perfected security interest in proceeds becomes unperfected on the 21 st day after [attachment] unless: (1) The following conditions are satisfied: (A) a filed financing statement covers the original collateral (B). . . a security interest [in the proceeds] may perfected by filing in [that same office] (C) the proceeds are not acquired with cash proceeds 35

Changes in collateral: Proceeds 9 -315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. (d) A perfected security interest in proceeds becomes unperfected on the 21 st day after [attachment] unless: (1) The following conditions are satisfied: (A) a filed financing statement covers the original collateral (B). . . a security interest [in the proceeds] may perfected by filing in [that same office] (C) the proceeds are not acquired with cash proceeds (2) the proceeds are identifiable cash proceeds; or 36

Changes in collateral: Proceeds 9 -315(c). A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. (d) A perfected security interest in proceeds becomes unperfected on the 21 st day after [attachment] unless: (1) The following conditions are satisfied: (A) a filed financing statement covers the original collateral (B). . . a security interest [in the proceeds] may perfected by filing in [that same office] (C) the proceeds are not acquired with cash proceeds (2) the proceeds are identifiable cash proceeds; or (3) the security interest in the proceeds is perfected. . . when 37 the security interest attaches or within 20 days. . .

More Big Picture Perfection requires: 1. Attachment and 2. Compliance with perfection requirements § 9 -308(a). [A] security interest is perfected if it has attached and all of the application requirements for perfection in Sections 9 -301 through 9 -316 have been satisfied. If secured party doesn’t have a security interest, secured party isn’t perfected. 38

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” 39

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) 40

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. 41

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? 42

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) 43

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? 44

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. 45

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. Does GBT still have SI? § 9 -315(a). 46

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. Does GBT still have SI? § 9 -315(a). Perfected? § 9 -507(a). 47

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. Does GBT still have SI? § 9 -315(a). Perfected? § 9 -507(a). c. BBW trades an inventory boat for a forklift. Does GBT have a security interest in the forklift? Yes. § 9315(a)(2). 48

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. Does GBT still have SI? § 9 -315(a). Perfected? § 9 -507(a). c. BBW trades an inventory boat for a forklift. Does GBT have a security interest in the forklift? Yes. § 9315(a)(2). 49

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. Does GBT still have SI? § 9 -315(a). Perfected? § 9 -507(a). c. BBW trades an inventory boat for a forklift. Does GBT have a security interest in the forklift? Yes. § 9315(a)(2). Is that security interest perfected? Yes. § 9 -315(d)(1). 50

Problem 23. 1, page 407 GBT is monitoring collateral of Bonnie’s Boat World, Inc. The description is: “inventory, accounts, and chattel paper” a. Bonnie took an inventory boat home; used it personally. Is the boat still inventory? § 9 -102(a)(48) No. Is GBT still perfected? Type 1 change, inventory to equipment. § 9 -507(b). No new filing needed. (Assuming no boat certificate of title law. ) b. Bonnie transferred ownership to herself. What evidence would exist? Maybe a bill of sale, check. Does GBT still have SI? § 9 -315(a). Perfected? § 9 -507(a). c. BBW trades an inventory boat for a forklift. Does GBT have a security interest in the forklift? Yes. § 9315(a)(2). Is that security interest perfected? Yes. § 9 -315(d)(1). 51

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) 52

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). 53

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days 54

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. § 9102(a)(64) 55

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. § 9102(a)(64) 56

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. § 9102(a)(64) GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds? 57

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. § 9102(a)(64) GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds? Only for 20 days. § 9 -109(d)(8); § 9 -315(c) and (d) 58

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. § 9102(a)(64) GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds? Only for 20 days. § 9 -109(d)(8); § 9 -315(c) and (d) How can GBT continue perfection after 20 days? 59

Problem 23. 1, page 407 Description of collateral: “inventory, accounts, and chattel paper” d. Inventory boat sold for cash, cash used to buy forklift. Does GBT have a security interest in forklift? § 9 -315(a)(2) Is GBT perfected in the forklift? § 9 -315(d)(3). Not after 20 days. e. Inventory boat suffered insured storm damage. Does GBT have a security interest in the insurance claim? Yes. § 9102(a)(64) GBT is not named as a loss payee. Is GBT perfected in the insurance proceeds? Only for 20 days. § 9 -109(d)(8); § 9 -315(c) and (d) How can GBT continue perfection after 20 days? 60 Be named loss payee on policy. § 9 -315(d)(3) governs.

Problem 23. 2, page 408 Filing GBT files against Southwest Appliance Corporation in that name 61

Problem 23. 2, page 408 Filing Name change Now 6 months GBT files against Southwest Appliance Corporation in that name Six months ago, debtor changed its name to Southwest General, Inc. 62

Problem 23. 2, page 408 Filing Name change Now 6 months GBT files against Southwest Appliance Corporation in that name Six months ago, debtor changed its name to Southwest General, Inc. Is GBT’s filing seriously misleading? 63

Problem 23. 2, page 408 Filing Name change Now 6 months GBT files against Southwest Appliance Corporation in that name Six months ago, debtor changed its name to Southwest General, Inc. Is GBT’s filing seriously misleading? Almost certainly. 9506(c). 64

Problem 23. 2, page 408 Filing Seriously misleading name change Now 4 months § 9 -507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand? 65

Problem 23. 2, page 408 Filing Seriously misleading name change Now 4 months § 9 -507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand? Not perfected in recently acquired inventory. 66

Problem 23. 2, page 408 Filing Seriously misleading name change Now 4 months § 9 -507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand? Not perfected in recently acquired inventory. a. What do we do now? 67

Problem 23. 2, page 408 Filing Seriously misleading name change Amendment 4 months § 9 -507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand? Not perfected in recently acquired inventory. a. What do we do now? Amend. 68

Problem 23. 2, page 408 Filing Seriously misleading name change Amendment 4 months § 9 -507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand? Not perfected in recently acquired inventory. a. What do we do now? Amend. Then what is our priority date? 69

Problem 23. 2, page 408 Filing Seriously misleading name change Amendment 4 months § 9 -507(c). The seriously misleading name change created a four-month window for amending our financing statement. We missed it. Where do we stand? Not perfected in recently acquired inventory. a. What do we do now? Amend. Then what is our priority date? Filing date (collateral acquired through four months); amendment date (collateral 70 acquired after four months). § 9 -507 Comment 4.

Problem 23. 2, page 408 Filing Seriously misleading name change 4 months b. What if GBT’s collateral had been a construction crane? 71

Problem 23. 2, page 408 Filing Seriously misleading name change 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane 72

Problem 23. 2, page 408 Filing Seriously misleading name change Do we need to amend? 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane 73

Problem 23. 2, page 408 Filing Seriously misleading name change Do we need to amend? Sale 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane c. What if Southwest sells the crane for $235, 000? 74

Problem 23. 2, page 408 Filing Seriously misleading name change Do we need to amend? Sale 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane c. What if Southwest sells the crane for $235, 000? The financing statement remains effective against the crane 75

Problem 23. 2, page 408 Filing Seriously misleading name change Do we need to amend? Sale 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane c. What if Southwest sells the crane for $235, 000? The financing statement remains effective against the crane The financing statement is not effective against the cash 76

Problem 23. 2, page 408 Filing Seriously misleading name change Do we need to amend? Sale 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane c. What if Southwest sells the crane for $235, 000? The financing statement remains effective against the crane The financing statement is not effective against the cash GBT is perfected in the cash § 9 -315(c) and (d)(2) 77

Problem 23. 2, page 408 Filing Seriously misleading name change Do we need to amend? Sale 4 months b. What if GBT’s collateral had been a construction crane? The financing statement remains effective against the crane c. What if Southwest sells the crane for $235, 000? The financing statement remains effective against the crane The financing statement is not effective against the cash GBT is perfected in the cash § 9 -315(c) and (d)(2) 78 What if Southwest buys a replacement crane? § 9 -315(d)(3)

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts 79

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts Prior financing statement: “Lawn dogs manufactured by Suti. ” 80

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts Prior financing statement: “Lawn dogs manufactured by Suti. ” Could that security interest be attached to more than the lawn dogs? 81

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts Prior financing statement: “Lawn dogs manufactured by Suti. ” Could that security interest be attached to more than the lawn dogs? Yes. As proceeds, Problem 10. 4. 82

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts Prior financing statement: “Lawn dogs manufactured by Suti. ” Could that security interest be attached to more than the lawn dogs? Yes. As proceeds, Problem 10. 4. Or by SA description 83

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts Prior financing statement: “Lawn dogs manufactured by Suti. ” Could that security interest be attached to more than the lawn dogs? Yes. As proceeds, Problem 10. 4. Or by SA description Could that security interest be perfected in more than the lawn dogs? 84

Problem 23. 3, page 408 GBT’s proposed loan: $500, 000 to RLE, secured by: 1. Equipment 2. Inventory (minus “lawn dogs manufactured by Suti”) 3. Accounts 4. Money in bank accounts Prior financing statement: “Lawn dogs manufactured by Suti. ” Could that security interest be attached to more than the lawn dogs? Yes. As proceeds, Problem 10. 4. Or by SA description Could that security interest be perfected in more than the lawn dogs? Yes, accounts, barter, cash. § 9 -315(c), (d)(1), (d)(2)85

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? 86

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? 87

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? 88

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? 89

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? 90

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? 91

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? No 92

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? No d. Does it matter if Beaver commingles other money in the account? 93

Problem 23. 5 October’s description of collateral: “equipment, inventory, accounts, chattel paper, general intangibles, fixtures, money, and bank accounts. ” a. Does October have a security interest in debtor’s bank account at Gargantuan? Yes. By description Yes. If proceeds. b. Is October perfected in the bank account? As original collateral: Only if October has “control” As proceeds: Yes, to the extent “identifiable, ” § 9 -315(d)(2) c. Does it matter how long the proceeds are in the account? No d. Does it matter if Beaver commingles other money in the account? No. 94