Missouri Revised Statutes
Chapter 400
Uniform Commercial Code
←400.09-614
Section 400.9-615.1
400.09-616→
August 28, 2015
Application of proceeds of disposition--liability for deficiency and right to surplus.
400.9-615. (a) A secured party shall apply or pay over for application
the cash proceeds of disposition under section 400.9-610 in the following
order to:
(1) The reasonable expenses of retaking, holding, preparing for
disposition, processing, and disposing, and, to the extent provided for by
agreement and not prohibited by law, reasonable attorney's fees and legal
expenses incurred by the secured party;
(2) The satisfaction of obligations secured by the security interest or
agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by any subordinate security
interest in or other subordinate lien on the collateral if:
(A) The secured party receives from the holder of the subordinate
security interest or other lien an authenticated demand for proceeds before
distribution of the proceeds is completed; and
(B) In a case in which a consignor has an interest in the collateral,
the subordinate security interest or other lien is senior to the interest of
the consignor; and
(4) A secured party that is a consignor of the collateral if the secured
party receives from the consignor an authenticated demand for proceeds before
distribution of the proceeds is completed.
(b) If requested by a secured party, a holder of a subordinate security
interest or other lien shall furnish reasonable proof of the interest or lien
within a reasonable time. Unless the holder does so, the secured party need
not comply with the holder's demand under subsection (a)(3).
(c) A secured party need not apply or pay over for application noncash
proceeds of disposition under section 400.9-610 unless the failure to do so
would be commercially unreasonable. A secured party that applies or pays
over for application noncash proceeds shall do so in a commercially reasonable
manner.
(d) If the security interest under which a disposition is made secures
payment or performance of an obligation, after making the payments and
applications required by subsection (a) and permitted by subsection (c):
(1) Unless subsection (a)(4) requires the secured party to apply or pay
over cash proceeds to a consignor, the secured party shall account to and pay
a debtor for any surplus; and
(2) The obligor is liable for any deficiency.
(e) If the underlying transaction is a sale of accounts, chattel paper,
payment intangibles, or promissory notes:
(1) The debtor is not entitled to any surplus; and
(2) The obligor is not liable for any deficiency.
(f) The surplus or deficiency following a disposition is calculated
based on the amount of proceeds that would have been realized in a
disposition complying with this part to a transferee other than the secured
party, a person related to the secured party, or a secondary obligor if:
(1) The transferee in the disposition is the secured party, a person
related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition is significantly below the
range of proceeds that a complying disposition to a person other than the
secured party, a person related to the secured party, or a secondary obligor
would have brought.
(g) A secured party that receives cash proceeds of a disposition in good
faith and without notice that the receipt violates the rights of the holder
of a security interest or other lien that is not subordinate to the security
interest under which the disposition is made:
(1) Takes the cash proceeds free of the security interest or other lien;
(2) Is not obligated to apply the proceeds of the disposition to the
satisfaction of obligations secured by the security interest or other lien;
and
(3) Is not obligated to account to or pay the holder of the security
interest or other lien for any surplus.
(L. 2001 S.B. 288, A.L. 2002 S.B. 895)
2001
2001
400.9-615. (a) A secured party shall apply or pay over for
application the cash proceeds of disposition in the following order to:
(1) The reasonable expenses of retaking, holding, preparing for
disposition, processing, and disposing, and, to the extent provided for by
agreement and not prohibited by law, reasonable attorney's fees and legal
expenses incurred by the secured party;
(2) The satisfaction of obligations secured by the security interest
or agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by any subordinate
security interest in or other subordinate lien on the collateral if:
(A) The secured party receives from the holder of the subordinate
security interest or other lien an authenticated demand for proceeds before
distribution of the proceeds is completed; and
(B) In a case in which a consignor has an interest in the collateral,
the subordinate security interest or other lien is senior to the interest
of the consignor; and
(4) A secured party that is a consignor of the collateral if the
secured party receives from the consignor an authenticated demand for
proceeds before distribution of the proceeds is completed.
(b) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of the
interest or lien within a reasonable time. Unless the holder does so, the
secured party need not comply with the holder's demand under subsection
(a)(3).
(c) A secured party need not apply or pay over for application
noncash proceeds of disposition under this section unless the failure to do
so would be commercially unreasonable. A secured party that applies or
pays over for application noncash proceeds shall do so in a commercially
reasonable manner.
(d) If the security interest under which a disposition is made
secures payment or performance of an obligation, after making the payments
and applications required by subsection (a) and permitted by subsection
(c):
(1) Unless subsection (a)(4) requires the secured party to apply or
pay over cash proceeds to a consignor, the secured party shall account to
and pay a debtor for any surplus; and
(2) The obligor is liable for any deficiency.
(e) If the underlying transaction is a sale of accounts, chattel
paper, payment intangibles, or promissory notes:
(1) The debtor is not entitled to any surplus; and
(2) The obligor is not liable for any deficiency.
(f) The surplus or deficiency following a disposition is calculated
based on the amount of proceeds that would have been realized in a
disposition complying with this part to a transferee other than the secured
party, a person related to the secured party, or a secondary obligor if:
(1) The transferee in the disposition is the secured party, a person
related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition is significantly below
the range of proceeds that a complying disposition to a person other than
the secured party, a person related to the secured party, or a secondary
obligor would have brought.
(g) A secured party that receives cash proceeds of a disposition in
good faith and without notice that the receipt violates the rights of the
holder of a security interest or other lien that is not subordinate to the
security interest under which the disposition is made:
(1) Takes the cash proceeds free of the security interest or other
lien;
(2) Is not obligated to apply the proceeds of the disposition to the
satisfaction of obligations secured by the security interest or other lien;
and
(3) Is not obligated to account to or pay the holder of the security
interest or other lien for any surplus.
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