Commercial Law in the USA: The Case of Massive Dynamics - Assignment Example

It can also be perfect by possession, especially when the collateral is tangible or is in form of a document. The item can be perfected by control if the collateral is in form of an electronic document. Also in temporal circumstances, the item can be perfected automatically without involving both parties. In this case, the ONB has four possible methods as indicated above, but the most suitable method is perfection by filing.

The reason behind this is that ONB can verify whether it is the first to file against the collateral or whether the collateral has been used to secure a loan in other institutions. This method ensures the creditor does not lose interest against collateral (Floyd, 89). b) Item B, crops growing on 100 acres of land meant for the production of organic food for the firm employees is applicable under article 9. The item is classified under tangible goods specifically farm products. ONB could perfect the collateral in two ways; first by filing the financial statements at the right office within Kansas as seen in section 9-311(a).

Secondly, they can perfect the item by possession as seen in sections 9-312(b). The perfection should only occur under the jurisdiction where the farm produce is located in Kansas an example being our case. Having assessed the possible ways in which item B can be perfected, the best possible way to perfect it is through possession. By possessing the farm produce, the Bank would be able to recoup the interest easily since the farm products earn a profit and are also able to sustain themselves. The bank will also be able to regain some of the debt given to Massive Dynamic in case it faces insolvency.

The possibility of ONB gaining back the security interest is increased when it possesses the farm produce due to its rights over the debtor in case of bankruptcy. In the case of filing, the State has the right to repossess the farm on behalf of the bank. In the end, however, this may cause litigation fees to be high and waste time (Richard, 37). All these scenarios and facts in our case make it easy to perfect the collateral by possession rather than perfection through filing. c) Item C is covered by Article 9 under the quasi-intangible goods specifically classified under certificated security.

The certificate can be perfected in 4 ways which are; perfection by filling, perfection by possession, perfection by control, and automatic perfection. The best possible way for perfecting the item is by control. By taking control of the certificate it becomes easier for the creditor’s Bank to recover the security interest with limited costs compared to other methods. It enables the creditor to borrow loans from the central reserve using the collateral as a result of custodial rights over the certificate.

However, he must take into consideration the maturity period of the collateral, in case the secured debtor has not filed the continuation document. In conclusion, all these possible methods should be considered carefully because some collateral is advantageous to other collaterals.