and "Promissory Notes" Perfecting Interests In Financial - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A UCC Security Interests in Payment Intangibles: Intercompany Loans, Debt Obligations and "Promissory Notes" Perfecting Interests In Financial Instruments and Contractual Payment Obligations WEDNESDAY, JULY 13, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Dean T . Kirby, Jr., Principal, Kirby & McGuinn , San Diego Professor Thomas E. Plank, Joel A. Katz Distinguished Professor of Law, University of Tennessee College of Law , Knoxville, Tenn. Steven O. Weise, Partner, Proskauer Rose , Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-873-1442 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you email that you will receive immediately following the program. For additional information about continuing education, call us at 1-800-926-7926 ext. 35.

Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to “Conference Materials” in the middle of the left - • hand column on your screen. • Click on the tab labeled “Handouts” that appears, and there you will see a PDF of the slides for today's program. • Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon. •

UCC Security Interests in Payment Intangibles: Intercompany Loans, Debt Obligations, and ‘Promissory Notes’ Dean T. Kirby, Jr. Kirby & McGuinn, A P.C. Professor Thomas E. Plank U. Of Tennessee College of Law Steve Weise Proskauer Rose LLP

Outline • Benefits • Definitions + Examples • Characterization • Types of transactions • Creation • Perfection • Priority • Enforcement 6

Benefits of treatment as ‘payment intangible’ • Automatic perfection for sales  No public record • Can't be primed by possession 7

Definition (§ 9-102) • Reason for creating • Core definition •Expansion of ‘accounts’ 8

Examples • Loan agreement •‘Note’ • Electronic note • Participation • Intercompany loan entered on books • Rights with respect to credit cards 9

Scope – characterization (§§ 8- 102 + 9-102) • Differentiate from:  Notes (paper)  Chattel paper  Accounts  Debt securities 10

Chattel paper – Splitting the Atom? • Chattel Paper is a record that evidences . . . (among other things)  Both a monetary obligation and a security interest  like a consumer installment purchase contract, or  A lease of specific goods  like a commercial equipment lease • What happens when parties purport to separate the monetary obligations of the buyer or lessee from other obligations which are contained in the record, or from the record itself?  Are the severed payment obligations:  Accounts?  Payment intangibles?  Still chattel paper? 11

Electronic notes •Control of ‘transferrable records’ under:  UETA  E-Sign 12

Creation – by agreement (§ 9- 203) • Security agreement  Sales agreement (for sales) 13

Creation – automatic (§ 9-203) • Ancillary rights • Guaranty • Letter of credit rights • Underlying mortgage • Underlying security agreement 14

Restrictions on transfer • Sa les v ‘ pledge ’  §§ 9-406(e) + 9-408(b) • Effect of characterization 15

Perfection – automatic (§ 9- 309(3)) • Automatic for sale  Stripped payment rights? 16

Perfection – filing (§ 9-310) • Filing  Should filing be dropped? 17

Perfection – other methods • Not by possession (even if called a ‘note’) ( § 9-313) • Not by control (§§ 9-104 – 9-107) • Automatic for ancillary rights (§ 9- 308(d) + (e)) • Proceeds (§9-315) 18

Priority • Filing  Filing help in sales? •Not by possession (even if called a ‘note’) • Possibly by control?  Under UETA or E-SIGN • Transferable records? • Proceeds  Negotiable proceeds 19

Stripping to create "payment intangible" • In re Commercial Money Center, Inc .  350 B.R. 465 (Bankr. App. 9th Cir. 2006) • Animal, Vegetable or Mineral? In re Commercial Money Center, 39 U. Tol. L. Rev. 861 (2008) • Classifying the Right to Rental Payment Streams Stripped Off a Lease, 86 Tex. L. Rev. 857 (2008) 20

Enforcement - sale • Sale  Restrictions on transfer (§ 9- 406(e) (revised))  Commercial reasonableness issues 21

Enforcement – collection • Notice to account debtor (§ 9- 406) • Notice to seller/borrower? • Duty of commercial reasonableness? 22

Enforcement – account debtor defenses • Account debtor defenses (§ 9- 404) • Hell-or-high-water term (§ 9-403) • Offsets 23

Thank You Dean T. Kirby Kirby & McGuinn dkirby@kirbymac.com Professor Thomas E. Plank University of Tennessee College of Law tplank@tennessee.edu Steven O. Weise Proskauer Rose sweise@proskauer.com 24