§9-1205. Use or disposition of collateral permissible
175 words·~1 min read·
/me/title-11-uniform-commercial-code/9-1205A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1). A security interest is not invalid or fraudulent against creditors solely because:
(a). The debtor has the right or ability to:
(i)Use, commingle or dispose of all or part of the collateral, including returned or repossessed goods;
(ii)Collect, compromise, enforce or otherwise deal with collateral;
(iii)Accept the return of collateral or make repossessions; or
(iv)Use, commingle or dispose of proceeds; or [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(b). The secured party fails to require the debtor to account for proceeds or replace collateral. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(2). This section does not relax the requirements of possession if attachment, perfection or enforcement of a security interest depends upon possession of the collateral by the secured party.
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]