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Purchase Money Security Interests, Consignments and Double Debtors Under UCC Article 9

Navigating Common but Frequently Misunderstood Provisions of UCC Article 9

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, May 1, 2025

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, April 4, 2025

or call 1-800-926-7926

This CLE webinar will explore common issues under Article 9 of the Uniform Commercial Code (UCC) that come up frequently in practice but are often misunderstood. The panel will discuss purchase money security interests (PMSIs), consignments and double debtors, the contexts in which they typically arise, and how they work in practice, particularly in enforcement situations and priority disputes with other creditors.

Description

When structuring secured loans, many lenders require that borrowers and any guarantors grant a security interest in all their assets. However, these so-called liens have many exclusions. PMSIs are super liens that can take priority over blanket liens when the transaction involves the purchase of goods. The rules of perfection can be tricky and full of traps for the unwary.

Consignments also present unique issues for lenders. UCC Article 9 Section 102 defines a consignment as a "transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale." Counsel for lenders dealing with consignment inventory must engage in ongoing due diligence and include covenants in loan agreements and financing statements that will protect the lender's security interest in the consigned goods. Failure to do so can have devastating consequences in the event of a consignee's bankruptcy.

Another issue that frequently arises is the "double debtor" problem, which occurs when a debtor acquires property or assets that are already subject to a security interest created by another debtor. If a lender becomes aware of a double debtor issue, it is imperative that the lender remain diligent in protecting its collateral by filing both an amended and new financing statement. These statements should include special language to ensure the lender's security interest is protected.

Listen as our authoritative panel of commercial finance attorneys addresses common problems that arise for lenders under UCC Article 9 and provides guidance for navigating these issues to protect a lender's interests in its collateral.

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Outline

  1. Overview: common but misunderstood issues under UCC Article 9
  2. PMSIs
  3. Consignments
  4. Double debtors
  5. Special language to consider in loan documents and financing statements to protect a lender's security interest
  6. Practitioner pointers and key takeaways

Benefits

The panel will review these and other key considerations:

  • What are the perfection requirements for a PMSI?
  • What requirements must a lender meet to satisfy the UCC's consignment requirements to maintain its superior interest in consigned goods?
  • What is the double debtor problem and what steps can lenders take to protect and secure their interests?
  • Are there special loan covenants that lenders should consider to protect their security interests from these common issues?

Faculty

Boisvert, Katilee
Katilee M. Boisvert

Counsel
Shipman & Goodwin

Ms. Boisvert represents companies in a variety of aspects of corporate and transactional law, including commercial...  |  Read More

Schulwolf, James
James C. Schulwolf

Partner
Shipman & Goodwin

Mr. Schulwolf is a partner in Shipman's Business and Corporate Practice Group.  He focuses his practice on...  |  Read More

Attend on May 1

Early Discount (through 04/04/25)

Cannot Attend May 1?

Early Discount (through 04/04/25)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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