FIU Security Interests Discussion

Answer with 1 Paragraph to the paper uploaded ” Answer to Discuss”, Please be consistent with the context of the PDF uploaded “Original Debate”

Running head: SECURITY INTERESTS
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Security Interests
Student Name
Tutor Name
Institution Affiliation
Course
Date
SECURITY INTERESTS
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Question 1
The creditor for the Kayak would need to file a UCC-1 financing statement because the
land is real property and boats are personal property. The creditor for the 4-Runner also needs to
file a UCC-1 because motor vehicles are also personal property but not real property. The
creditor for the iMacs would need to file a UCC-1 financing statement because computers are
private property but not real property.
Question 2
KDM filed a financing statement with the court but failed to list its partners in its debtors’
names. This omission means that if Brighton Homes won the case, they would be entitled to
collect on their claim against KDM and be entitled to recover damages against KDM’s partners
even though they were not listed as creditors or defendants in the suit. Under UCC 9-503(c), the
law dictates that a fictions name in a financial statement is not enough for excellence.
Question 3
The Kayak, the sound system, and the motor vehicle would meet the Purchase Money
Security Interests requirements. On the other hand, the iMac would not qualify as a PMSI as it
falls under equipment. In a nutshell, the PMSI has three components: The first two parts of the
PMSI refer to the parties involved; the third part relates to brands or types of goods or services
being purchased as part of a series of transactions between two (or more) distinct businesses or
entities, each with separate ownership and control over their operations and financial resources,
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with each entity acting independently in such transactions. The FTC does not define “distinct” in
its Model Act and Rules.
Question 4
KDM electronics could retain the sound system unless Barton has paid 60% of the cost
amount of the sound system. A secured party can keep the reacquired collateral as long as it
comprises consumer goods on which the debtor has paid a purchase of 60% or more on the cost
attached to the PMSI, where the secured party must make a sell or discard the reacquired
collateral within a given duration of ninety days. Failure to which the secured party could
become subject to other liabilities.
Debate
An unsecured creditor should not be granted relief even if the debtor’s name is unknown
because it would create a strong incentive to hide names when a debt is owed. Debtors should
always be publicly listed so creditors and other interested parties can determine whether they are
at risk of default and their financial obligations. If someone hides their name, that person may
lose or find themselves in a worse position than they had anticipated due to this lack of
information. This could especially have unfortunate consequences for that outside of their
country, where their debtors may still reside and have assets available for seizure by creditors.
Many jurisdictions permit creditors to file suit against corporations and partnerships. However,
these statutes typically are not adequate for the enforcement of creditors’ rights to assets obtained
utilizing a corporate or partnership transaction if the debtor is unknown. A creditor wishing to
sell assets of a corporate debtor that does not share the name of its stockholders or partners with
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other creditors would have little or no way to do so without obtaining a judgment in their favor
through litigation and then suing the corporation to force it to sell on their behalf.