The US Commercial Law: The Case of the Massive Dynamic Company - Assignment Example

Download file to see previous pages The Massive dynamic has the first collateral being the 10-acre piece of land which is located in Arizona. This land used for product testing qualifies as collateral under article 9 despite its location in Arizona. Since the purpose of the code is to unify the code and by incorporating legal formalities on the assets that qualify to be collateral. This is the reason why the asset qualifies as collateral as per the provisions of article 9. More so, this piece of land qualifies as a quasi-intangible since it is represented by a piece of evidence document which is the title deed. For the item to be perfected, ONB needs to consider doing financial filling of the item in the proper office which is located in Delaware. 

The case of the 100 acres of land (item B) which is used for the production of food for the firm’s employees is stated in article 9 and classified under tangible goods implying the farm products. These are two essential key ways of making sure that the collateral is filed. The first one is perfection by possession as stated in section 9-311 a) and the second possible perfection process is perfection by financial statement filing which is done in the right office, in this case, the right office is Kansas as evident in section 9-312 (b). In this scenario, the best possible option for the bank to perfect item B is through possession. This is because, through possession, the bank can regain the profits that the farm yields. On the other hand, the bank will be in a better position to recoup debts owed by Massive Dynamic if the bank becomes bankrupt. The attached interest can also be acquired in case of insolvency since the bank can regain the security interest attached to the property as a result of an upper hand concerning the debtors. The other advantage of this filing is the help of the government that the bank will get to acquire the firm; this might however result in increased cost and waste of time because of the involved steps. As analyzed above, it is more appropriate to perfect the item by possession rather than by filing perfection.

This third item C is also provided in Article 9, it is under quasi-intangible goods which are further classified under certificated security. The perfection of this item can be done in the following four ways; perfection by possession, perfection by filling, automation perfection, and perfection by control. Based on several reasons applying to each perfection method, the most suitable perfection method, in this case, is perfection by control. The reason for this suggestion is simply because perfection by control makes it much easier and cost-effective for the creditor’s bank to recoup the security interest attached to the acquired collateral. Compared to others this method is much easier and less costly. The custodial rights that will be obtained in this case will also give the bank advantage of getting loans from the central reserve. The only challenge in this perfection is the time that the investigation process will take regarding the possible filling of the secured debtor.

The Model NC1701 which is the fourth item and is a computer for managing the company’s credit finance, payroll, and receivables is applicable under Article 9, it is classified as tangible goods and it thus falls under software or equipment. This item according to article 9 can be perfected using two methods which are; perfection by filing and perfection by possession. Perfection by the filing is the most suitable option in this case because of the wearing and maintenance of the equipment with time. When ONB possesses the hardware, no one will be able to use the property as a security for acquiring the loan. This is the best option for perfecting the collateral since the law can aid in the legal acquisition of the property in times of need.

Item E is an immovable item and thus not applicable under article 9, this immovable item is located in Michigan Grand Haven. Article 9 does not provide for the categorization of this item and thus this item is disqualified from being collateral and for this reason, it cannot be used by a creditor.

The limousine which is the last item in this case is classified as quasi-intangible which is under the document of title or certificate of title in this case. Several methods can be used to perfect this item, these methods are; perfection by control, perfection by possession, perfection by filing, and perfection by automation. If the item is presented in an intangible form, these methods are suitable. In this case, perfection by the filing is the most suitable method of perfecting for ONB to utilize in its perfection process. This method is suitable mainly because the property can be acquired after the completion of the bank charges. More so, the creditor has a right over any possible third parties that claim a security interest in the property (collateral). ...Download file to see next pages Read More