CAPITAL UNIVERSITY LAW SCHOOL

SECURED TRANSACTIONS
FALL 2008 SYLLABUS 
PROFESSOR FERRIELL

Welcome to Secured Transactions!  

In “Secured Transactions” we will spend most of our time studying Article 9 of the Uniform Commercial Code (U.C.C.).  Article 9 governs security interests in personal property and fixtures. It is about the rights of secured creditors with respect to debtors, the debtor’s collateral, and the rights of others who make a claim to the collateral. Article 9 has been adopted by all 50 states, the District of Columbia, and Puerto Rico.  Ohio’s version is in Chapter 1309 of the Ohio Revised Code.

We will also cover portions of the Bankruptcy Code, the Federal Tax Lien Act, the Food Security Act, the Federal Trade Commission’s Unfair Credit Practices Regulations, a few aspects of Federal Patent, Copyright, and Trademark law, and portions of the Ohio Retail Installment Sales Act.  The Bankruptcy Code is particularly important, because Article 9 Security Interests are only really important when a borrower cannot pay all of its creditors.  When borrowers cannot pay, bankruptcy looms.  A security interest that cannot survive the debtor’s bankruptcy is nearly worthless.  You might notice that nearly all of the court decisions in the book were decided by bankruptcy courts, or on appeal following an initial decision in bankruptcy court.  Bankruptcy court is where Article 9 of the U.C.C. is applied.  State court decisions are relatively rare.  Nearly all of these cases involve attacks by the bankruptcy trustee – acting as the representative of all creditors – on the enforceability of a security interest in a bankrupt debtor’s property.  An understanding of some of the bankruptcy code’s provisions are key to an understanding of the law of secured transactions. It is sometimes said that bankruptcy is the “acid test” of a security interest.

Though it might seem like it at times, this is not a course in bankruptcy law.  For a comprehensive survey of bankruptcy law you must take a separate course in bankruptcy law such as Creditors’ and Debtor’s Rights, Consumer Bankruptcy, or Business Bankruptcy.  In Secured Transactions we will study only those portions of the bankruptcy code that directly affect the rights of secured creditors.  There is also a separate course in Real Estate Finance which deals with issues affecting the rights of creditors whose rights are secured by a mortgage or other lien on real estate.  This course deals almost exclusively with situations involving a wide variety of types of personal property, both tangible and intangible (see UCC § 9-109), not real estate. But see UCC § 9-334 regarding fixtures. 

You should also be aware that Article 9 of the UCC was revised in 1998.  These revisions went into effect nearly everywhere in the United States on July 1, 2001.  Because the five-year transition period, between the old version and the current version, expired on June 30, 2006, you are highly unlikely to ever need to learn any details about the earlier version of Article 9.  Still, court decisions regarding its provisions are frequently helpful in interpreting the current law.   Pay close attention to the dates of cases and to whether the language of any cited provisions of Article 9 is the same as the language in the current code. 

Many students find this one of their most challenging law school courses.   Attending class every day, studying the casebook's text, and most importantly, working your way through the code's language to draw your own solutions to the problems in the book, are critical to your understanding of this challenging area of the law. 

OFFICE HOURS

My office hours this semester, when I will usually be available in my office at Capital, are:

• Monday 2-4
• Tuesday 2-4
• Thursday 2-4

Except, at unpredictable times when faculty committee meetings conflict with these times, and except, on rare occasions, when I am out of town.  You may also find me here on Monday, Tuesday, or Thursday mornings before 10:30.  However, at those times I may be completing my preparation for Contracts, which meets at 10:45, or for Secured Transactions.

The best way to reach me is via e-mail: jferriell@law.capital.edu.  Feel free to call me at home, particularly if I fail to respond to your e-mail within a day, but if you call in the evening, you won't be able to rely on anything I tell you after about 9 pm, when I turn into a pumpkin.

REQUIRED MATERIALS

There are two required books for this course: a casebook and a statutory supplement -

·        Lynn Lopucki & Elizabeth Warren, Secured Credit: A Systems Approach (5th ed. 2007) ISBN 0-7355-5645-8

·        Commercial and Debtor-Creditor Law – Selected Statutes (2008 edition) ISBN 978-1-55941-526-0.   Or any statutory supplement containing the following:

o       The 2003 Official version of the Uniform Commercial Code (including the pre-2003 version of UCC Article 2) (the 2003 revisions are unlikely to adopted anywhere – they are a virtual dead-letter).

o       The United States Bankruptcy Code as amended in 2005 by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

o       The Food Security Act

o       The Tax Lien Act

o       Federal Trade Commission Unfair Credit Practices Regulations

In addition, you may find it helpful to consult the following supplemental materials:

• Lawrence, Henning & Freyermuth, Understanding Secured Transactions (4d ed. 2007).
• James Brook, Secured Transactions, Examples & Explanations (3d ed. 2005).
• White & Summers, Uniform Commercial Code Hornbook (5th ed. 2000).

For more details about aspects of bankruptcy law not expressly covered in this course, you may find it useful to examine “Understanding Bankruptcy” (2d ed. Lexis/Nexis 2007).  Except in those passages written by Prof. Janger, it explains many the provisions of the bankruptcy code exactly as they would be explained by Prof. Ferriell.

Sometime during the semester you may also want to examine the Ohio Secretary of State UCC Search Pages at: http://www.sos.state.oh.us/

ATTENDANCE, PREPARATION, & PARTICIPATION

I expect you to be in class every day unless you have an unavoidable and compelling reason to be absent. I also expect you to have carefully studied the assigned material, including:

1. The problems in the book at the end of each Assignment;
2. Any cited or assigned provisions of the Uniform Commercial Code (UCC) or other statute;
3. The Official Comments to the cited or assigned provisions; and
4. Any relevant definitions contained in these statutory materials and any associated Official Comments.

To prepare adequately for class, you should do what I do:

1. Read the assigned pages associated with the scheduled assignment. 
2. Take notes while you read, including briefing the few cases that appear. 
3. If the assignment refers to a section of the UCC, the Bankruptcy Code, or any other rule or statute, you should locate the cited language and study both it and any accompanying Official Comments carefully.  You should also find and carefully study any relevant definitions which may appear elsewhere in the statutory supplement (for example, sometimes one must examine provisions of the Bankruptcy Code to gain an understanding of a term in the UCC, and vice-versa).
4. At times, you may find it useful to log on to TWEN and review the materials posted by Prof. Ferriell regarding the substantive material the assignment deals with. These materials frequently include a practice quiz that you may use to evaluate your level of preparation for class.
5. Work your way through each problem at the end of the assignment and prepare a written answer to the questions they pose.
6. As you prepare solutions to the problems, re-read any relevant portions of the text and any relevant statutory language.
7. Make notes about the precise language in the text or a statute that lead you to your solution of the problem.
8. Log on to TWEN and take the multiple-choice quiz associated with the material assigned for the class in question.  If you cannot answer at least 8 of the 10 questions correctly, repeat steps 1-7.

Depending on your level of reading comprehension and degree of focus while you are working, this process is likely to take 2-4 hours for each 55 minute class period.  

If you've done this much work, class should serve primarily to confirm the accuracy of what you already know or to correct errors you have made as you have worked your way through the material.  Class will also highlight details that the book may not have emphasized and add context for the assigned material. It will also provide you with the opportunity to test your understanding of the assigned materials, with additional examples not included in the book.

After class, you should assemble what you have studied into a comprehensive outline of the material covered in the assignment. This might take another 1-2 hours for each class period, depending on how fast you work and how much time you spent developing a basic understanding of the material before class.

If you choose to spend less time than this, you will not develop a clear understanding of all of the material in this course and will need to spend extra time learning the material immediately before the exam and during the stressful time period in the two months before the bar exam. 

TWEN EXERCISES

I plan to maintain a series of online quizzes and other exercises at The West Education Network.

http://lawschool.westlaw.com/twen.  Students who are unfamiliar with using TWEN should contact one of West’s law school representatives listed on the http://lawschool.westlaw.com home page after logging in.

GRADING

Your grade for this course will be determined based upon your performance on a comprehensive final examination. You will be permitted to bring with you and use your copy of the assigned materials and any notes you have personally made. Copies (photocopied, handwritten, or otherwise) of other materials are not permitted.

The exam will likely include a combination of essay and multiple choice questions.

SCHEDULE OF ASSIGNMENTS

Note:  You are assigned to read the UCC and other statutory sections cited in the assigned pages of the text, together with their Official Comments.  There will be supplemental problems, from time to time, drawn in part from previous Secured Transactions Questions on the Ohio Bar Exam.  Note that we will not have class on Election Day, Tuesday, March 4, 2008.  We will make-up that class in a review session at the end of the semester, at a time and room to be determined later.

Class	Date	Topic	Pages	Problems
1	8/25	Remedies of Unsecured Creditors Under State Law See also Ohio Rev. Code § 2329.66(A) (on TWEN)	3-19; 648-664	Set 1 (skip 1.2)
2	8/26	Security and Foreclosure	20-34	Set 2
3	8/28	Repossession of Collateral	35-52	3.1-3.6
4	9/2	Repossession of Collateral Cont’d	52-54	3.5-3.9
5	9/4	Article 9 Sale and Deficiency	76-80	5.1-5.4
6	9/8	Article 9 Sale and Deficiency Cont’d	75-76; 80-89	5.3-5.6
7	9/9	Ohio Retail Installment Sales Act: Repossessions & Foreclosure Sales		Handout (on TWEN)
8	9/11	Treatment of Secured Claims in Bankruptcy	91-128	Read Sets 6 & 7
9	9/15	Formalities for Attachment of Security Interests	129-148	Set 8
10	9/16	What Collateral and Obligations are Covered	149-157; 159-161	Set 9 (skip 9.6)
11	9/18	Proceeds, Products & other Value-Tracking Concepts	162-177 178-188	Set 10 11.1 & 11.2
12	9/22	Legal Limits on Collateral	190-210	Set 12 (Skip 12.2)
13	9/23	Default, Acceleration, & Cure	211-231 236-240	Set 13 (skip 13.5 & 13.6); ORC § 1317.12 (see TWEN); 14.2
14	9/25	The Prototypical Secured Transaction – Floorplanning	232-267	15.1-15.5
15	9/29	Priority; Meaning of Priority; the Personal Property Filing System; Perfecting  with respect to Intellectual Property	271-289	Set 16 (skip 16.2b)
16	9/30	Article 9 Financing Statements: The Debtor's Name	290-306	Set 17.1-17.3, 17.5, 17.6
17	10/2	Article 9 Financing Statements: Other Information	307-319	18.1, 18.2, 18.3, 18.6
18	10/6	Exceptions to the Article 9 Filing Requirement: Perfection by Possession, Control, & Automatic Perfection	320-336	9.1-19.4
19	10/7	Exceptions to the Article 9 Filing Requirement, Cont'd	320-336	Problems 19.4-19.7
20	10/9	The Land and Fixtures Recording Systems	337-352	Problems 20.1 & 20.3
	10/13	Class to be Rescheduled -
21	10/14	Characterizing the Collateral for the Purpose of Perfection	353-364 Handout on TWEN	Set 21
22	10/16	Maintaining Perfection Through Lapse & Bankruptcy	367-382	Set 22.1-22.3, 22.8
23	10/17 or 10/18 makeup	Maintaining Perfection Through Changes of Name, Identity, or Use	383-394	Set 23
24	10/20	Maintaining Perfection Through Relocation of  Debtor or Collateral	394-405	Set 24
25	10/21	Maintaining Perfection in Certificate of Title Systems	406-421	Set 25 (skip 25.5 & 25.6)
26	10/23	Meaning of Priority in and out of Bankruptcy	423-35 436-450	26.2, 26.3, & 26.5 Read 27.2
27	10/27	Lien Creditors Against Secured Creditors: The Basics	453-463	Set 28 (skip 28.4, 28.8, & 28.9)
28	10/28	Lien Creditors Against Secured Creditors: Future Advances	464-477	29.2, 29.3, & 29.5
29	10/30	Trustees in Bankruptcy Against Secured Creditors: The Strong Arm Clause	478-493	30.1, 30.2, 30.3a,
30	11/3	Trustees in Bankruptcy Against Secured Creditors: Preferences	494-502	Problem 31.1
	11/4	Election Day – Class to be Rescheduled
31	11/6	Trustees in Bankruptcy Against Secured Creditors: Preferences cont'd	494-503	Problems 31.2, 31.3, & 31.4
32	11/10	Secured Creditors Against Secured Creditors: The Basics	504-517	Problems 32.1, 32.3 – 32.6
33	11/11	Secured Creditors Against Secured Creditors: The Basics cont'd	505-519	Problems 32.7-32.9, 32.2
34	11/13	Priority of Buyers of Accounts & Chattel Paper as Secured Parties		Handouts (on  TWEN)
35	11/17	Secured Creditors Against Secured Creditors: Land and Fixtures	520-538	Problems 33.3 - 33.5
36	11/18	Sellers Against Secured Creditors	558-575	Set 35.1, 35.2, 35.5
37	11/20	Buyers Against Secured Creditors	576-593	36.1-36.5
38	11/24	Buyers Against Secured Creditors	576-595	36.4-36.9
39	11/25	Statutory Lien Creditors Against Secured Creditors	596-615	Set 37
40	12/1	Competitions Involving Federal Tax Liens: The Basics	616-632	Set 38
41	12/2	Competitions Involving Federal Tax Liens: Advanced Problems	633-647	Set 39
42	TBA	Review Session to be Scheduled before the Exam
		Final Exam