Sec. 9-315.02. Disposal of collateral by debtor to persons other than those previously disclosed to secured party - penalties for violation - defense.

234 words·~1 min read·/il/chapter-810/act-5/9-315-02

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)Where, pursuant to Section 9-205.1, a secured party has required that before the debtor sells or otherwise disposes of collateral in the debtor's possession he disclose to the secured party the persons to whom he desires to sell or otherwise dispose of such collateral, it is unlawful for the debtor to sell or otherwise dispose of the collateral to a person other than a person so disclosed to the secured party.

(2)An individual convicted of a violation of this Section shall be guilty of a Class A misdemeanor.

(3)A corporation convicted of a violation of this Section shall be guilty of a business offense and shall be fined not less than $2,000 nor more than $10,000.

(4)In the event the debtor under the terms of a security agreement is a corporation or a partnership, any officer, director, manager, or managerial agent of the debtor who violates this Section or causes the debtor to violate this Section shall be guilty of a Class A misdemeanor.

(5)It is an affirmative defense to a prosecution for the violation of this Section that the debtor has paid to the secured party the proceeds from the sale or other disposition of the collateral within 10 days after such sale or disposition.