DE PAUL UNIVERSITY COLLEGE OF LAW
SYLLABUS
SECURED TRANSACTIONS
Professor Livingston
Spring 2000
Office: Room 828
(312) 362-8746
mlivings@wppost.depaul.edu
Required Texts
Nimmer, Hillinger, and Hillinger,
Commercial Transactions: Secured Financing (Lexis, 2nd ed. 1999)(NHH)
Commercial and Debtor-Creditor
Law: Selected Statutes (Foundation Press, 1999 ed.)(Stat. Supp.)
Handout materials
Course Description
This course surveys the law applicable
to financial transactions involving security interests. This law includes
primarily Article 9 of the Uniform Commercial Code, the federal Bankruptcy
Code, the federal Tax Lien statute, the Uniform Fraudulent Transfer Act,
and miscellaneous state laws.
In studying secured transactions,
we will examine the scope of Article 9, attachment of security interests,
perfection, determination of priorities among parties, the effect of bankruptcy
on security interests, and the remedies of the secured party upon the debtor's
default. We will also discuss specialized types of secured financing such
as those involving inventory, accounts receivable, equipment, and fixtures.
As some of you may know,
the National Conference of Commissioners on Uniform State Laws and the
American Law Institute recently completed a major revision of Article 9.
Because the revised version will likely not be in effect in any state before
the year 2001, we will be studying both the old and the new versions of
Article 9 for this course. The old version will be undoubtedly the version
tested on the Illinois Bar Exam this year.
Method of Instruction
I use a combination of lecture,
case analysis, discussion of the statutes, and problem solving. Because
this is a largely statutory course, problems will be emphasized. Work out
the problems in the text before class and be prepared to discuss them.
To determine which Code sections apply to a particular problem you should
consult the separate problem table, focusing on the current version of
Article 9 (old Article 9) with some attention to the revised version of
Article 9 (new Article 9).
Method of Evaluation
Student grades will be based
primarily on an in-class examination administered at the end of the semester.
The examination will consist of a number of essay and multiple choice questions
presenting various factual situations that require analysis of the legal
issues involved. Essay answers will be graded on the basis of (1) the student's
knowledge of the relevant legal principles and their rationale, (2) the
student's ability to ascertain the issues presented by the factual situations,
(3) the student's ability to analyze possible resolutions, and (4) the
cogency and clarity of the student's analysis.
The examination will be entirely
open book. Students may use any written materials during the examination,
including but not limited to the casebook, the statutory supplement, the
course supplement, class notes and outlines, and treatises.
Excellence in class participation
also will be considered in determining the final grade for the course.
See attached statement on the Present and Prepared Policy.
SECURED TRANSACTIONS
Spring 2000
Professor Livingston
PRESENT AND PREPARED POLICY
My "present and prepared"
policy allows students who regularly attend class and participate in class
discussion the opportunity to raise their exam grades one-half step (e.g.,
from a B to a B+). I will distribute a seating chart on the second day
of class (on the first day for evening students) that all students should
sign. Starting on the third day (second day for evening students) of class,
I will arrive a few minutes early with a dated copy of the seating chart
and a red pen. All students who are present and ready to be called on should
come to the front of the room and place a red check next to their name.
Students who are more than two minutes (five minutes for evening students)
late may not check off their names. On any given day, I will call on only
those students who have checked off their names.
A student who checks off
his/her name for 32 classes (10 classes for evening students) out of 40
(out of 13) will receive a half-step elevation of his/her grade from the
final exam. Students who check their names but are not prepared may suffer
a decrease of one-half grade for "bluffing." Students whose raw examination
grade is a D or an F will not be entitled to have their grades raised under
this policy.
Students who must miss class
for any reason (e.g., illness, family emergency, jury service, moot court
competitions, etc.) cannot be credited with being "present and prepared."
The purpose of the eight classes (three classes for evening students) that
may be missed without penalty is to cover these events. In cases of extraordinary
hardship, the professor may make exceptions to this policy.
In addition to being "present
and prepared," students are encouraged to contribute voluntarily to class
discussion. I reserve the right to adjust upward by an additional half-step
the grade of any student who has made an exceptionally high quality contribution
to class discussion over the course of the semester.
My faculty clerk, Terry Gant
(in the eighth floor faculty wing, north side), will keep track of the
check marks for this class, and if you want to ascertain the number of
classes for which you have checked "present and prepared," please see him.
SECURED TRANSACTIONS
Spring 2000
Professor Livingston
ASSIGNMENT SHEET
[You should also read the applicable statutory provisions referred to in the attached problem table.]
Week 1 Overview of Secured
Financing
NHH, pp. 9-24
The Cosmic View
of Secured Credit
NHH, pp. 24-44; probs. 1.1; 1.3;
FTC Unfair Credit Practices Regs. (Stat. Supp.)
What Law Governs;
Secured but Hardly Secure
NHH, pp. 44-55; prob.
1.5
Week 2 History of
Modern Security Law; Collateral Classification
NHH, pp. 57-74;
probs. 2.1, 2.2, 2.5, 2.6
The Pre-Closing
Phase; Attachment: Written Security Agreement
NHH, pp. 74-97;
prob. 2.9
Sample Security Agreement,
NHH, pp. 775-795
In the Matter of A-1 Paving and
Contracting, Inc. (Handout)
Scope of Interest
Taken
NHH, pp. 97-108;
prob. 2.11
Week 3 Attachment:
Rights in Collateral
NHH, pp. 110-123;
prob. 2.14
U.C.C. §§
2-401, 2-501, 2-502, 2-716 (Stat. Supp.)
Requirement of
Notice; Methods of Perfection
NHH, pp. 135-159;
probs. 3.2, 3.4
Adequacy of
Financing Statement
NHH, pp. 160-182;
probs. 3.8, 3.10
Week 4 Maintaining Perfection
NHH, pp. 184-194;
probs. 3.12, 3.15
PEB Commentary No.
3 (Handout.)
Continuation Statements;
Termination Statements
NHH, pp. 194-203;
prob. 3.17
Perfection & Maintaining
Perfection in Multi-State
Transactions
NHH, pp. 203-212;
prob. 3.18
Week 5 Errors and Liability
for Errors
NHH, pp. 227-235
Priority Issues: Lien
Creditors
NHH, pp. 253-272;
probs. 4.1, 4.2
I.R.C. § 6323
(Stat. Supp.)
Priority Among Secured
Creditors
NHH, pp. 274-289;
probs. 4.5, 4.7, 4.8
Week 6 Purchase Money Security
Interests
NHH, pp. 290-295;
prob. 4.11
Transformation Rule;
Subordination Agreements;
NHH, pp. 299-309;
prob. 4.20
In re Short (Handout)
Priorities: Buyers
of Goods
NHH, pp. 309-324;
prob. 4.21
Week 7 Introduction to
Bankruptcy
NHH, pp. 347-374
Trustee's Strong Arm
Clause, § 544(a)
NHH, pp. 374-389;
probs. 5.3, 5.4
Preferences, §
547(b)
NHH, pp. 391-403;
prob. 5.7
Week 8 Exceptions, §
547(c)
NHH, pp. 404-418;
prob. 5.10
Default Issues: Waiver
and Material Breach
NHH, pp. 423-439;
prob. 6.1
Acceleration Clauses
& Demand Notes
NHH, pp. 440-453;
prob. 6.4
Week 9 Repossession
NHH, pp. 454-465;
prob. 6.7
"Fear and Anger Follow
Killing of Repo Man" (Handout)
Debtor's Right to
Redeem
NHH, pp. 466-471;
prob. 6.8
815 ILCS 405/26 (Handout.)
Strict Foreclosure
& Disposition
NHH, pp. 471-484;
prob. 6.11
Week 10 Notice; Other Aspects
of Disposition
NHH, pp. 485-508
Price Received; Financing
the Asset Pool
NHH, pp. 508-514 ;
525-540; probs. 6.19, 6.21
Creditor Control; Proceeds
NHH, pp. 540-557;
prob. 7.5
Week 11 Handling Cash Proceeds
NHH, pp. 558-565;
probs. 7.10, 7.11
PEB Commentary No.
7 (Handout.)
Proceeds and Insolvency
NHH, pp. 566-575;
prob. 7.12
Secondary Financing; PMSI
NHH, pp. 576-600;
prob. 7.14
Week 12 Consignments
NHH, pp. 608-618;
prob. 7.18
Chattel Paper
NHH, pp. 619-625;
prob. 7.20
PEB Commentaries Nos.
5, 8, & 14 (Handout)
Impact of Federal
Law
NHH, pp. 625-631;
prob. 7.21
Week 13 Financing Based
on Promises: Accounts and Payment Intangibles
NHH, pp. 633-648;
prob. 8.4
Accounts and Payment
Intangibles (cont’d)
NHH, pp. 649-670;
probs. 8.7, 8.11
Instruments
NHH, pp. 670-690;
prob. 8.22
Week 14 Fixtures
NHH, pp. 710-728;
prob. 9.2
Equipment Leasing
NHH, pp. 729-731;
prob. 9.5
In re Edison Brothers
Stores, Inc. (Handout)
In re Taylor (Handout)
Handout problems--Exam review
SECURED TRANSACTIONS
Spring 2000
Professor Livingston
PROBLEM TABLE
Old Article 9 v. New Article 9
(Part 1)
The following table will help you
in working out the assigned problems from the casebook, using both old
(existing) Article 9 and new (revised) Article 9. In working out the problems,
consult the appropriate Code sections under both the old and new versions
of Article 9.
| Old (Existing) Article 9 | New (Revised) Article 9 | |
| Problem 1.3 | 9-503, 9-506 | 9-609, 9-623 |
| Problem 1.5 | 9-102, 9-104, 1-201(37) | 9-109, 1-201(37) |
| Problems 2.1, 2.2, 2.5, 2.6 | 9-105(1)(b), 9-105(1)(i), 9-106,
9-105(1)(h), 9-109 |
9-102(a)(2), (11), (23), (33), (34), (44),(47), (48) |
| Problems 2.9, 2.11 | 9-203, 9-110 | 9-203, 9-108 |
| Problem 2.14 | 9-203 | 9-203 |
| Problems 3.2, 3.4 | 9-303, 9-302, 9-304, 9-305, 9-302(1)(e), 9-401(1), 9-302(1)(d) | 9-308, 9-310, 9-312, 9-313, 9-309(2), 9-501(a), 9-309(1) |
| Problems 3.8, 3.10 | 9-402(1), 9-402(7), 9-110, 9-402(8), 9-208 | 9-502(a), 9-503, 9-108, 9-504, 9-506, 9-210 |
| Problems 3.12, 3.15 | 9-402(7) | 9-907, 9-508 |
| Problem 3.17 | 9-403(2),(3) | 9-515 |
| Problem 3.18 | 9-103 | 9-301, 9-307, 9-316 |
| Problems 4.1, 4.2 | 9-301(1)(b) | 9-317 |
| Problem 4.5 | 9-312(5), 9-401(2) | 9-322(a) |
| Problems 4.7, 4.8 | 9-312(5), (7) | 9-322(a), 9-323(a) |
| Problem 4.11 | 9-312(4) | 9-324(a), (g) |
| Problem 4.20 | 9-404, 9-406 | 9-512, 9-513 |
| Problem 4.21 | 9-307, 9-301(1)(c), 9-201 | 9-320, 9-317(b), 9-201 |
| For the problems in Weeks 7 & 8 we will be referring priminarily to the federal Bankruptcy Code or case law. | ||
| Problem 6.7 | 9-503, 9-504(1), 9-507 | 9-609, 9-615, 9-625 |
| Problem 6.8 | 9-506 | 9-623 |
| Problem 6.11 | 9-504(3), 9-507 | 9-610, 9-625, 9-626, 9-627 |
| Problems 6.19, 6.21 | 9-504(1), 9-507(2) | 9-611, 9-612, 9-613, 9-626, 9-627 |
| Problem 7.5 | 9-306(3) | 9-315 |
| Problems 7.10, 7.11 | 9-306(3) | 9-315(b) |
| Problem 7.12 | 9-306(4) | 9-315 |
| Problem 7.14 | 9-312(3) | 9-324(b), (c) |
| Problem 7.18 | 2-326. 9-114 | 9-102(a)(20), 9-109(a)(4), 9-103(d), 9-319 |
| Problem 7.20 | 9-308, 9-306(5) | 9-330, 9-315 |
| Problem 7.21 | Bank. Code § 547 (c)(5) | Bank. Code § 547(c)(5) |