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When the debtor defaults on the agreed debt agreement, then legally the creditor has the right to the debt collateral object for payment of achievements that should be carried out by the debtor by executing it, but the implementation must of course be by applicable legal provisions. Execution of the debt guarantee object can be carried out by parate executie, by way of title executorial, or by way of a private sale. As for Parate Executie or direct execution on one's power, it is a practice of simplifying executions without having to involve the judiciary, which is quite simple, low cost, and relatively fast in time. Unfortunately, parate executives in Indonesia often cause problems in their applications. including because of its existence which currently exists or does not exist and is even considered the same as the concept of the executorial title, so its application becomes inconsistent. The existing problems cause the author to intend to conduct research that aims to find out what exactly is the cause of problems occurring in the implementation of parate executie and what are the solutions to overcome these problems. This research uses normative legal research methods using a statutory approach (statute approach) and a case approach (case approach) that are relevant to the object of the problem in this research. The results of the research from the author's research to find out what are the real problems in implementing parate executie in Indonesia are that there are inconsistent arrangements and implementation and there is confusion in the arrangement which originally regulated 3 (three) types of execution that can be taken by creditors against collateral objects of mortgage rights Also included here is the object of fiduciary guarantees if the debtor defaults (default), namely the exercise of executorial title, parate executie on his own power and underhanded execution, but in the end, it is no longer different and all must get fiat from the Chair of the District Court. [ABSTRACT FROM AUTHOR]

The share of secured debt issued (as a fraction of total corporate debt) declined steadily in the United States over the twentieth century. This stems partly from financial development giving creditors greater confidence that high‐quality borrowers will respect their claims even if creditors do not obtain security upfront. Consequently, such borrowers prefer retaining financial flexibility by not giving security up front. Instead, security is given contingently—when a firm approaches distress. This also explains why, superimposed on the secular decline, the share of secured debt issued is countercyclical. [ABSTRACT FROM AUTHOR]

The law of not registering fiduciary creditors has significant consequences for the enforceability and validity of fiduciary guarantees. Based on Law Number 42 of 1999 concerning Fiduciary Guarantees, creditors receiving fiduciaries must be registered as members of the Fiduciary Guarantee Council. Failure to register a fiduciary creditor can give rise to legal problems in terms of executing fiduciary guarantees, because the guarantee cannot be used as evidence or a legal resource. Therefore, efforts need to be made to prevent this from happening and ensure that creditors who receive fiduciaries meet the requirements to be registered as members of the Fiduciary Guarantee Council. This research uses a qualitative data analysis approach to conduct normative legal studies. The main legal sources in this research are primary legal sources. The conclusion of this research is that an unregistered fiduciary agreement has legal consequences, where the creditor does not have a preferred position in the event of bankruptcy and only acts as a concurrent creditor. And if the debtor defaults, the creditor does not have direct executorial rights over the fiduciary collateral, if the debtor is unable to pay off the entire debt at the agreed time. [ABSTRACT FROM AUTHOR]

This research aims to determine the resistance to cancellation of auction for the collateral object of the mortgage right and the creditor’s responsibility toward the auction winner, when, the object of the mortgage right has a lawsuit against the creditor from another party. The research method used in this research is a normative juridical research method. The research results show that the auction cannot be canceled if it complies with existing regulations and procedures as regulated in PMK.No.213/PMK.06/2020 concerning instructions for carrying out auctions. Creditors can be held responsible if an auction is canceled after the auction has been executed as regulated in Minister of Finance Regulation, PMK No. 213/PMK.06/2020 concerning instructions for implementing auctions. Creditors must ensure the validity of the mortgage object being auctioned. So, if the creditor is negligent in this matter, it is the responsibility of the creditor (auction seller) to provide compensation for third-party losses. [ABSTRACT FROM AUTHOR]

The World Bank uses getting credit as a measurement of a country's economic development, and a common approach to bolstering economic activity is to carry out necessary reforms on secured transactions laws.1 Amongst many legal systems, a non-possessory security interest over movable assets subject to registration is prominent.2 While the number of security instruments has drastically increased within the last century, one of the most sophisticated ones was invented more than 150 years ago: floating charge.3 Many of its features have been modified in line with the evolving needs of the market, yet its constitutive specialties stayed the same to provide sufficient flexibility for borrowers and creditors. In this paper, we analyze the role of registration and its effects, while examining the functioning of the debtor's (borrower's) right to dispose of encumbered assets by identifying the limits imposed on their withdrawal from the ambit of creditors' security interests, exploring diverging implementations given the different restrictions deployed by various legislators. [ABSTRACT FROM AUTHOR]

The debtor does not have the legality or rights before the law to transfer the fiduciary guarantee object to a third party and the transfer of the fiduciary guarantee object without the approval of the creditor becomes invalid. This compensation is because the debtor has committed an unlawful act, therefore it requires innovation or renewal debt in this case the old debt is removed and replaced with a new debt by Chapter 1413 Civil Code. The Fiduciary Guarantee Act Should provide more specific arrangements regarding the position of objects that have been made object fiduciary guarantee because things made object Collateral are the main key in terms of providing guarantees from debtors to creditors. Given the fact that there are still many constraint- obstacles faced by creditors during the execution process of fiduciary collateral object [ABSTRACT FROM AUTHOR]

Two main creditors exist in commercial real estate: arm's-length investors and banks. We model commercial mortgage-backed securities (CMBS) as the less informed source of credit. In equilibrium, these investors fund properties with a low probability of distress, and banks fund properties that may require renegotiation. As a natural experiment, we test the model using the collapse of the CMBS market during 2007–2009, when banks funded both collateral types. Our results show that properties likely to have been securitized were less likely to default or be renegotiated. This suggests that securitization in this market funds safe collateral. [ABSTRACT FROM AUTHOR]

A recent French reform, dated 15 September 2021, which entered into force on 1 January 2022, largely modifies the law of guarantees and security interests. It clarifies a certain number of rules, suppresses several security interests that appeared to be obsolete, and reinforces the protection of warrantors without neglecting the interests of creditors. Adopted to promote security, flexibility, and accessibility to French Law, and to enhance the efficiency of secured transactions, the reform has generally been perceived as successful. The purpose of this paper is to present the reform in an international perspective and to try to understand whether it fits the purpose it was assigned: to strengthen the attractiveness of French Law in the comparative landscape. We will demonstrate that, regarding a certain number of international instruments and foreign laws, the answer tends to be affirmative. The French Government might also seize this opportunity to include France in several international projects that it has, so far, stayed away from, such as the ratification of the Cape Town Convention. [ABSTRACT FROM AUTHOR]

The results of this study show that the right of liability is the object of guarantee that s most in demand by creditors (banks) as debt collateral. The value of the rights contained in the certificate rights of dependents has an important influence in determining the position of creditors as creditors who have preferential rights or are only limited to as a concurrent creditors. If the value of the dependent rights has greater value than the debtor’s debt, then the creditor's position as the holder of the liability right is the preferred creditor, which takes precedence over repayment of it over other creditors. However, the determination of the creditor’s position as a preferred creditor or not can also be viewed from the proceeds of the sale of the object of liability from the results of auction execution. If the selling price of the object of liability is reader than e debtor's debt, the creditor has the right to take precedence over full repayment by taking the proceeds Net sales are only limited to debtors. Meanwhile, if the proceeds from the sale of the object of liability are smaller than the debtor’s debt, then the remaining debt of the debtor positions the creditor as a concurrent creditor meaning that the repayment of the remaining debtor is divided equally with other creditors [ABSTRACT FROM AUTHOR]

Copyright of Riwayat: Educational Journal of History & Humanities is the property of Riwayat: Educational Journal of History & Humanities and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The stakeholder theory predicts that corporate social responsibility (CSR) activities reduce the morale hazard problem between creditors and corporate firms and decrease the requirement of collaterals in debt transactions. Consistent with this theory, our analysis shows that there is a negative relationship between CSR and secured debt in a cross‐section of firms. Further, by using the mandatory CSR regulation implemented in India as a quasi‐natural experiment setting, we observe the same negative relationship across periods in firms that were impacted by the regulation. These results suggest that CSR activities may substitute collaterals for obtaining debt from financial institutions, especially banks. [ABSTRACT FROM AUTHOR]

Copyright of Romanian Review of Private Law / Revista Română de Drept Privat is the property of Universul Juridic Publishing House and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

As parties to international treaties, States assume legal duties to respect, to protect and to fulfil human rights, including the right to development. This position obliges States to act where flawed regulation leads to financial practices that are depleting public funds with no economic or legal justification. One example of flawed regulation is risk weighted pricing which has been introduced by the Basel Accords: due to risk premiums, some borrowers pay more than others for the same loans to protect lenders from the possible consequences of high-risk lending, even when all these borrowers end up fully repaying the loans. This approach ignores that paid instalments reduce the risk over time and that after full payment of the principal the default risk is reduced to zero. Moreover, the risk premium can be replaced by collateral which means that both are property pledged by the borrower to protect the lender in case of a default. Yet, interest rates and risk premiums of loans and bonds are not treated as prices and collateral, but as property of the lender. If the risk premium is not adjusted over time along with the real risk, regulation not only turns discriminatory but also permits lenders to keep this de-facto collateral, thus depriving State borrowers of their property and funds necessary for the realization of the right to development. Readjusting risk premiums as proposed in this article would, replace or complement the debt reliefs necessary to fulfil the States' human rights obligations while preventing discrimination against sovereign debtors based on their property status. [ABSTRACT FROM AUTHOR]

We investigate how financial contracting interacts with lending-channel effects by tracing the anatomy of a credit supply shock using micro-level data from a multinational bank. Borrowers with stronger lending relationships, higher nonlending revenues, and those that pledge collateral, especially outside assets and real estate, experience less credit rationing. Consistent with a tightening of financing constraints post shock, borrower composition shifts toward larger and less risky firms, and loans exhibit higher collateralization rates. Our analysis highlights the value of relationships and suggests that relationship banking is a channel through which borrowers can mitigate lending-channel effects. [ABSTRACT FROM PUBLISHER]

This paper assesses the role of a popular collateral constraint–based transmission mechanism in the North–South transmission of the 2008–2009 financial crisis. Theoretically, in the presence of collateral constraints, depressed asset prices caused by a negative shock in a large creditor country generate feedback cycles in a smaller debtor country, in which the decline in borrowing capacity and the collapses of investment and output reinforce each other. I find that although the mechanism has appealing qualitative features and is consistent with the data, quantitative results from the model can only account for a very small part of the actual output declines. [ABSTRACT FROM AUTHOR]

The study examines the factoring contract as an easy and quick method of financing of the adherent by way of turning to account of the unmatured claims. The factoring, regulated internationally, has been recognized and defined in the Romanian legislation, but without any regulation of its legal system. After the analysis of the framework contract and of the actual factoring contract, the study examines and explains the forms of the factoring contract and their finality, as well as the constitutive elements of the contract, with reference to the specific of the contracting parties and of the participants, as well as to the derived object, concerning certain, liquid, assignable, but not exigible claims. In the approach of the effects of the contract there have been analyzed the rights and obligations of the contracting parties and the relations generated by the contract. In respect of the obligations of the adherent, attention was paid to the transmission of the right over the claims by means of sale and to the achievement of the conventional subrogation and the moment of transmission of the right over claims, depending on the distinction between old line factoring and the maturity factoring. Likewise, it has been analyzed the legal and conventional obligation of warranty of the adherent in correlation to the risks assumed by the factor, related to payment default of the claims and the insolvency of the assigned debtor. In the same context, it has been also treated the problem of notification of the debtor concerning the assignment of claims, highlighting the consequences of the notification with regard to the enforcement of claims, as well as the aspects of opposability of the assignment to the debtors and to third parties, with reference to recording of the transmission of the universality of claims in the Electronic Archive of Security Interests on Movable Property. The rights and obligations of the factor have been examined from its perspective of owner of the invoices accepted for payment and of the takeover by the latter of the task of collection of claims from the clients of the adherent, in close correlation with the factor's function of financier of the adherent, by the payment of the claims assigned before maturity. The patrimonial factor-adherent relations have been integrated into the role of the current account opened by the factor for the payment of claims assigned and of the discount covered by the adherent, resulted from the difference between the nominal and conventional value of the claims assigned. By the correlated mechanism of crediting-debiting, the current account also fulfils its accounting function of crediting the adherent with the amounts that the factor collects as mandatary with regard to the invoices not accepted for payment and the function of debiting with the amounts owed by the debtor, following the regression for the claims for which the adherent has conventionally assumed the risk of payment default or of insolvency of the debtor. The effects of factoring contract are analyzed also in terms of its impact in case of insolvency of the adherent, including of the consequences related in this case to the turning to account of the claims assigned with regard to the assigned debtor. It was treated also the reverse-factoring mechanism, as well as the relations between the adherent, the factor and the assigned debtor, in relation to the effects of the notification in terms of the turning to account the claim right of the adherent, of the factor and of the payment obligation of the assigned debtor. In the final part of the study, there have been outlined the legal features of the factoring contract, with special outlook on the character intuitu personae of the contract, on the character of adherence contract and of random contract, in the hypothesis that the factor assumes the risk of payment default or of insolvency of the assigned debtor. The scientific approach led to the classification of the legal nature of the factoring contract as a complex of contracts and legal figures different, but convergent, with its own physiognomy and autonomy, which differentiates the factoring contract from its components. The particular configuration of the factoring contract, which defines it as a whole with its own legal system, has brought to attention the need for demarcation of the contract from its components. [ABSTRACT FROM AUTHOR]

The Japanese government has established an advisory body to amend the laws concerning security interests for facilitating borrowing by companies (especially small- to medium-sized enterprises). This new legislation is expected to be enacted as early as 2023. This article explains the background and current discussions concerning the new legislation, which will have a significant impact on insolvency and bankruptcy practices. [ABSTRACT FROM AUTHOR]

Author's Synopsis: It is common for a lender to take a security interest in all the equity interests in an entity that owns real estate (such a security interest is often called a "pledge" in this context). In many cases, that entity has no material assets other than a single piece of real estate. The property owner may or may not have a mortgage on the property. If it does, the mortgage may or may not be held by the same lender that holds the equity pledge. The pledge of the equity interests is taken pursuant to Article 9 of the Uniform Commercial Code, which has remedies provisions that can be enforced in many cases much faster than foreclosure of a mortgage and often without other disadvantages of a mortgage foreclosure. In recent New York litigation, the debtors argued that such a pledge violates centuries-old principles of real estate law holding that any device that allows a creditor with real property as collateral to realize on the property without going through the statutory real property foreclosure procedures is a "clog" on the property owner's equity of redemption and is invalid. That litigation was dismissed without a substantive ruling on the clogging argument and, to date, there is no reported decision on the issue. This Article reviews the relevant law, the arguments on each side of the issue, and how those arguments may play out in various factual settings. However, at present, there is not a definitive answer to the question posed in the article's title. [ABSTRACT FROM AUTHOR]

The article explores legal developments involving personal property secured transactions. Topics discussed are scope of Article 9 of the Uniform Commercial Code (UCC) relating to the outright transfer of ownership and an interest to secure an obligation, requirements for a security interest to attach to collateral, methods of perfection of a security interest, first-to-file-or-perfect rule on determining priority perfected security interest, security interest enforcement and debtor liability.

The article clarifies aspects of the relationship between the Uniform Protected Series Act and the Uniform Commercial Code, focusing on transactions with a protected series. It determines the debtor if a security interest is granted by a protected series to secure an obligation, if it is in the interest of the buyer of accounts, chattel paper, payment intangibles, or promissory notes and if it is in the interest of a consignor in a consignment, and debtor as a registered organization.

Delaware statutory trusts, limited liability companies, and limited partnerships can form separate series of assets that, if certain statutory requirements are met, cannot be reached by creditors of the entity as a whole or of any other series. Recently, many practitioners and commentators have been concerned that such series may not be among the entities falling under the UCC’s definition of “person” and thus may fall outside the realm of potential “debtors” for purposes of Article 9 of the UCC. This article reviews the series provisions in the acts governing Delaware statutory trusts, limited liability companies, and limited partnerships, and provides a framework for analyzing questions regarding the perfection of security interests in the assets of a series. [ABSTRACT FROM AUTHOR]

The Security Interest, thoroughly regulated under article 9 of the Uniform Commercial Code of the USA, allows debtors and creditors to engage in secured transactions, where a wide range of assets may serve as collateral, avoiding the risk of a debtor's default, thus enhancing the provision of credit. This article analyses article 9 and highlights the simplicity of this institute, stressing the difficulties and required amendments that should be made to the Uruguayan Pledges Without Transfer of Possession Act (n.° 17228) of the year 2000, which only partially imported the security interest model. [ABSTRACT FROM AUTHOR]

The article presents a commentary by the Permanent Editorial Board for the Uniform Commercial Code (UCC) on an issue concerning Article 9 of the UCC. Topics covered include the several statutory rights available to a secured party if the debtor defaults on obligations secured by a security interest in collateral within the scope of Article 9, and the effect of a transferee taking subject to the debtor's rights in the collateral.

Prior to enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, one of the most vexing and controversial questions in the consumer bankruptcy arena was whether a debtor who was current on her payments to a secured lender could retain the collateral both during and after the bankruptcy case by continuing to make the scheduled payments on the loan and otherwise avoid any act or omission that might pose a threat to the value or security of the collateral. No fewer than nine of the eleven circuit courts of appeals addressed this question and split as evenly as nine courts possibly could (5-4). The practice is known as "ride-through" and the 2005 Act, itself a screed against perceived debtor abuse of the bankruptcy law, set out to resolve the matter by eliminating the practice. However, as was true in connection with many other areas that the legislation addressed, Congress made a hash of it. The result has been nearly 15 years of continued litigation and even more confusion, unpredictably, and inconsistency than pervaded prior to the 2005 Act as courts have struggled to make sense of the poorly and illogically drafted amendments. The current situation compromises the integrity of the system and exposes debtors and creditors alike to costly uncertainty. Recognizing that the law governing individual bankruptcy needs to be tailored to have predictable and sensible consequences, this Article, after considering the myriad permutations that ride-through cases have taken since 2005, maps out a solution that it is contended takes into account of the legitimate interests of creditors as well as debtors. It also measures the consonance of the proposed approach for court-protected ride-through within the framework of the larger normative goals of the consumer bankruptcy system. [ABSTRACT FROM AUTHOR]

In a financial contracting model, we study the optimal debt structure to resolve financial distress. We show that a debt structure where two distinct debt classes coexist—one class fully concentrated and with control rights upon default, the other dispersed and without control rights—removes the controlling creditor's liquidation bias when investor protection is strong. These results rationalize the use and the performance of floating charge financing, which refers to debt financing where the controlling creditor takes the entire business as collateral, in countries with strong investor protection. Our theory predicts that the efficiency of contractual resolutions of financial distress should increase with investor protection. [ABSTRACT FROM PUBLISHER]

Copyright of Romanian Review of Private Law / Revista Română de Drept Privat is the property of Universul Juridic Publishing House and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article focuses on problems of creating an enforceable security interest under Article 9 of the Uniform Commercial Code (UCC) using virtual currency, such as bitcoin, as collateral. It mentions creation and perfection of a security interest, but the debtor subsequently transfers the collateral to a third party. It also mentions secured party select the proper mechanism of perfection in order to ensure perfection is achieved and priority secured.

While filing for bankruptcy does not seem appealing for any debtor or creditor regardless of the jurisdiction, the reluctance to use the bankruptcy system varies across countries. This article explores the underlying reasons and economic effects of the low usage of bankruptcy procedures in Spain, where the rate of business bankruptcies is one of the lowest in the world. Some authors have argued that the low usage of bankruptcy procedures in Spain is due to a "cultural" problem faced by Spanish entrepreneurs. According to this hypothesis, the lack of a "bankruptcy culture" makes Spanish entrepreneurs afraid to use of the bankruptcy system. In this paper, however, I advocate for a totally different hypothesis. In my opinion, the low rate of business bankruptcies in Spain is not due to a "cultural" problem but to an institutional one. Namely, I argue that the low rate of business bankruptcies is better explained by the unattractive insolvency regime for debtors and creditors traditionally existing in Spain, as well as other legal and institutional factors including a creditor-friendly corporate law, an efficient mortgage system, a rigid labor law, and a poor law of secured transactions. All these factors encourage both debtors and creditors to avoid the use of insolvency proceedings either by minimizing the risk of insolvency or by postponing--if possible, and even avoiding--the bankruptcy system once a debtor becomes insolvent. By exploring the underlying reasons for the low use of the bankruptcy system in Spain, this paper seeks to contribute to the general understanding of the low rate of business bankruptcies around the world while assessing the economic effects potentially associated with this low usage of bankruptcy procedures. The paper concludes with several recommendations to make use of the bankruptcy system more appealing for debtors and creditors. [ABSTRACT FROM AUTHOR]

Using unique internal bank data on ex ante appraised liquidation and market values of assets pledged as collateral in sixteen countries, we show that laws and institutions that strengthen creditor protection increase expected recovery rates for collateral. Stronger creditor protection increases expected recovery rates for movable collateral relative to immovable collateral and shifts the composition of collateral toward movable assets, thereby increasing debt capacity through both higher loan-to-values and attenuating the creditor's liquidation bias. Our results suggest that the recovery rate for collateral is an important first-stage mechanism through which creditor protection can improve contracting efficiency and enhance access to credit. Received September 17, 2018; editorial decision July 9, 2019 by Editor Andrew Ellul. [ABSTRACT FROM AUTHOR]

Copyright of Romanian Review of Private Law / Revista Română de Drept Privat is the property of Universul Juridic Publishing House and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

A vendor who fails to comply with UCC Article 9's strict requirements does so at the risk of forfeiting rights in its consigned inventory to the consignee's secured creditors with a perfected blanket security interest in the consignee's inventory, and being left with a low priority general unsecured claim. [ABSTRACT FROM AUTHOR]

What are business entities for? What are security interests for? The prevailing answer in legal scholarship is that both bodies of law exist to partition assets for the benefit of designated creditors. But if both bodies of law partition assets, then what distinguishes them? In fact, these bodies of law appear to be converging as increasing flexibility irons out any differences. Indeed, many legal products, such as securitization vehicles, insurance products known as captive insurance, and mutual funds, employ entities to create distinct asset pools. Moreover, recent legal innovations, including "protected cells" (which were created to facilitate such products), further blur the boundaries between security interests and entities, suggesting that convergence has already arrived. This Article identifies and defends a central distinction between business entities and security interests. We argue that while both bodies of law support asset partitioning, they do so with different priority schemes. Security interests construct asset pools subject to fixed priority, meaning that the debtor is unable to pledge the same collateral to new creditors in a way that changes the existing priority scheme. Conversely, entities are associated with floating priority, whereby the debtor retains the freedom to pledge the same assets to other creditors with the same or even higher priority than existing ones. The distinction is valuable in understanding financial products such as securitization, captive insurance, and mutual funds. We show that such products are driven by an appetite for assets pools with a fixed priority scheme, and recent legal innovations are primarily designed to meet this need. This distinction is consistent with the intuitive view of entities as managed going concerns and security interests as mere interests in assets. The distinction is also enduring. Despite the apparent convergence of forms, we predict that the distinction we offer will survive legal and technological innovations. [ABSTRACT FROM AUTHOR]

Article 9 of the Uniform Commercial Code (UCC) governs secured transactions in personal property in all fifty states and has been lauded as "the most successful commercial statute ever." But while Article 9 has facilitated commerce and economic growth, it remains complicated and inefficient in numerous respects. Its weaknesses are well known but have been considered necessary evils, accepted because no better approaches were available. But just as the UCC was motivated initially by the idea of streamlining the law to accommodate modern commerce, now that goal should motivate revision of the UCC itself. This Article proposes to remove and replace a primary structural component of Article 9 of the UCC--the filing system by which secured creditors put others on notice of their interest in items of collateral. The proposal would jettison this outdated and often ineffective method of providing notice of security interests, and instead, would look to modern technologies to stake clearer and more reliable claims on collateral. It would no longer be necessary to file financing statements indexed under the name and location of the owner of collateral. Instead, the proposed regime would allow creditors to stake their claims directly--by means of online "smart" maps or by electronic tags identifying interests in particular items of collateral--and would eliminate numerous arcane, inefficient, and inequitable features of the current regime. The proposal serves the broader goals of commercial law as well, by reducing needless legal complexity and more closely aligning legal requirements with business realities. The "disruptive" changes proposed in this Article would increase certainty in commerce and shape secured transactions law to emerging practices in business and finance. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Kufa Legal & Political Science is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

What are business entities for? What are security interests for? The prevailing answer in legal scholarship is that both bodies of law exist to partition assets for the benefit of designated creditors. But if both bodies of law partition assets, then what distinguishes them? In fact, these bodies of law appear to be converging as increasing flexibility irons out any differences. Indeed, many legal products, such as securitization vehicles, insurance products known as captive insurance, and mutual funds, employ entities to create distinct asset pools. Moreover, recent legal innovations, including "protected cells" (which were created to facilitate such products), further blur the boundaries between security interests and entities, suggesting that convergence has already arrived. This Article identifies and defends a central distinction between business entities and security interests. We argue that while both bodies of law support asset partitioning, they do so with different priority schemes. Security interests construct asset pools subject to fixed priority, meaning that the debtor is unable to pledge the same collateral to new creditors in a way that changes the existing priority scheme. Conversely, entities are associated with floating priority, whereby the debtor retains the freedom to pledge the same assets to other creditors with the same or even higher priority than existing ones. The distinction is valuable in understanding financial products such as securitization, captive insurance, and mutual funds. We show that such products are driven by an appetite for assets pools with a fixed priority scheme, and recent legal innovations are primarily designed to meet this need. This distinction is consistent with the intuitive view of entities as managed going concerns and security interests as mere interests in assets. The distinction is also enduring. Despite the apparent convergence of forms, we predict that the distinction we offer will survive legal and technological innovations. [ABSTRACT FROM AUTHOR]

Who pays the debtor's expenses that are incurred during the bankruptcy is a common debate. One potential option, especially in small to midsize corporate bankruptcies, is a secured creditor who can be surcharged in accordance with 11 USC § 506(c). Of that section's three requirements, most litigation concerns the requirement that the expense "benefit" the secured creditor. A split has recently developed between courts, led by the Seventh Circuit in Trim-X, that require the bankruptcy trustee to exclusively intend to benefit the secured creditor and obtain secured-creditor consent and courts, such as the Fifth Circuit in Domistyle, that merely require that the secured creditor receive a benefit. This Comment suggests a new approach that permits surcharges when there is a connection between the expense incurred and the secured creditor's collateral. This collateral-expenseconnection approach is the best reading of the text of § 506(c) and the pre-Code case law that the statute codifies. [ABSTRACT FROM AUTHOR]

The article focuses on the maintenance of risk of a systemic economic collapse. Topics discussed include genesis of equality in insolvency law and its impact on creditors; fundamental concepts of commercial law as applicable to secured and unsecured creditors; and maintenance of secured transactions. It also mentions about Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Since the 1990s financial economists have documented the essential role of creditors' rights in encouraging lenders to provide credit. This article demonstrates the central importance of creditors' ability to use movable assets such as inventories and accounts receivable (as distinct from immovable assets like real estate) as collateral when lending to business enterpriseses. Using a unique cross-country, micro-level loan data set that contains loan-to-value ratios for different assets, the authors found that the loan-to-values of loans that are collateralized with movable assets were lower in countries with weak collateral laws for movable assets, and that lending in such countries was biased toward the use of immovable assets. Using sector-level data, the authors also found that weak movable collateral laws were associated with distortions in the allocation of resources that favored immovable-based production and investment. The effects of resources that favored immovable-based production and investment. The effects of the collateral law reform enacted in Slovakia in 2003 were held up as providing support for the authors' findings. The authors also investigated which aspects of movable assets collateralization regimes are most important for facilitating the use of movable assets as collateral. They concluded that the two critical features of such regimes are the registration of collateral interests-which facilitates monitoring of collateral and avoids double pledging-and the ability of creditors to avoid lengthy court proceedings when taking possession of collateral. These findings suggest that it would be relatively easy for many countries to increase their supply of credit because reforming these aspects of legal regimes is fairly straightforward with few political obstacles. [ABSTRACT FROM AUTHOR]