Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Drawing the Line Between Real Property and Personal Property In the UCC
UCC §9-109 sets forth the scope of UCC Article 9. Under that section, "any transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract" is governed by Article 9, subject to certain exceptions. Included among those exceptions is any "creation or transfer of an interest in or lien on real property, including a lease or rents thereunder." UCC §9-109(d)(11). This exclusion is itself subject to an exception in the event of enforcement — that being as to security agreements that cover both personal and real property. UCC §9-604. The back-and-forth is certainly confusing, but what is clear is that it can be unclear exactly where the line between real property and personal property should be drawn.
This issue recently came before a judge in the bankruptcy case of the almost 200-year-old retailer Lord & Taylor (L&T). That case, In re Le Tote, 2020 WL 6875575 (Bankr. E.D. Va. Oct. 30, 2020), involved an attempt by a secured creditor to enforce payment obligations of L&T under a master lease agreement for 24 retail stores. U.S. Bankruptcy Judge Keith Phillips rejected that attempt, citing numerous reasons, but among them being that the plain language of §9-109 applied and the exception under §9-604 did not.
Background
The background for the Le Tote case is as follows.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.