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May 1, 2019Amanda Barrington

Does a Prior Perfected Secured Creditor Waive Its Priority By Failing to Take Action Before a Judgment Lien Creditor Garnishes the Collateral?

On December 31, 2018, the Court of Appeals of Texas for Eastland considered an issue of first impression for Texas. The issue was whether the holder of a prior perfected security interest waives its right to collateral by failing to take affirmative action prior to a junior creditor exercising rights on the same collateral. The Court held that a prior perfected security interest holder does not waive its senior security interest by failing to exercise elective remedies prior to a junior judgment creditor exercising foreclosure rights. The Court reasoned that a disposition by a junior creditor does not cut off a senior’s security interest, thus, the senior security interest is entitled to take possession of collateral from the junior secured party and conduct its own disposition. This was an issue of first impression in Texas, and the Court adopted its reasoning from the Oregon Court of Appeals

Securities Law Basics

This article is about securities law, particularly federal and state statutory law, the consequences for ignoring securities laws, and applying the law to unincorporated entity interests.

Pitfalls in the Perfection of a Security Interest

The primary purpose of this paper is to: (i) present the numerous “bear-traps” that can befall a secured creditor looking to perfect its security interest in personal property via the filing of a financing statement; and (ii) provide advice as to how to avoid such traps and ensure the perfection of the secured creditor’s interest in its collateral via the filing of a financing statement. From another perspective, this paper can also be utilized as a potential “target list” by a creditor residing in an inferior position (e.g., a second lienholder or unsecured creditor) looking to “topple the giant” by busting a heretofore superior lien and gaining equal footing with a party previously thought to be superior in position