UCC Security Interests in Payment Intangibles: Intercompany Loans, Debt Obligations and "Promissory Notes"

Perfecting Interests In Financial Instruments and Contractual Payment Obligations

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, October 17, 2017

Recorded event now available

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Program Materials

This CLE webinar will examine the treatment of UCC security interests in debt obligations, intercompany debt/loans, loans called “promissory notes", and other payment intangibles under the UCC. The program will provide guidance on creating and perfecting security interests in these contractual payment obligations.

Description

One complexity of creating and perfecting liens in intangible property under the UCC is determining the “type” of collateral under the classification scheme of Article 9. This is especially true of interests in payment intangibles—the right to receive payments under a contractual obligation that do not otherwise constitute an “account, chattel paper or a promissory note” delineated in Article 9.

Many contractual payment obligations such as intercompany loans, loans called promissory notes, and loans evidenced by electronic records are often part of the collateral package in leveraged finance deals. In addition, rights under loans not evidenced by notes are common in CLOs and participations.

There are specific considerations to create and perfect a security interest in payment intangibles. Counsel advising secured parties and debtors must understand how contractual payment obligations are treated under the UCC to protect their clients’ interest.

Listen as our authoritative panel of finance practitioners discusses how to create and perfect security interests in debt obligations, intercompany loans/debt, loans called promissory notes, and other payment intangibles under the UCC.

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Outline

  1. Article 9 definition of payment intangibles
  2. Specific types of payment intangibles (commercial loans, intercompany loans and loans called promissory notes but that are payment intangibles)
  3. Difference between a payment intangible, an account, chattel paper and true promissory notes
  4. Pitfalls facing secured parties with automatic perfection

Benefits

The panel will review these and other key issues:

  • What are the potential pitfalls for secured parties seeking perfection and priority of secured interests in payment intangibles?
  • How can counsel determine whether a contractual payment obligation is a payment intangible not falling within any other U.C.C.-delineated category of intangible rights?
  • What is the difference between a payment intangible, chattel paper and a true promissory note?

Faculty

Weise, Steven
Steven O. Weise

Partner
Proskauer Rose

Mr. Weise practices in all areas of commercial law and has extensive experience in financing, especially in those...  |  Read More

Kirby, Dean
Dean T. Kirby, Jr.

Principal
Kirby & McGuinn

Mr. Kirby represents lenders, creditors and fiduciaries in bankruptcy, foreclosure commercial collection,...  |  Read More

Plank, Thomas
Professor Thomas E. Plank

Joel A. Katz Distinguished Professor of Law
University of Tennessee College of Law & Morgan Lewis

Mr. Plank is a nationally recognized speicalist on mortgage backed and asset backed securities. Before joining the UT...  |  Read More

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