1998 Alaska Statutes
Title 45 TRADE AND COMMERCE
Chapter 45.09. SECURED TRANSACTIONS; SALES OF ACCOUNTS, CONTRACT RIGHTS, AND CHATTEL PAPER
Sec. 45.09.207. Rights and duties when collateral is in secured party's possession.

Sec. 45.09.207. Rights and duties when collateral is in secured party's possession.

(a) A secured party must use reasonable care in the custody and preservation of collateral in the possession of the secured party. In the case of an instrument or chattel paper, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.

(b) Unless otherwise agreed, when collateral is in the secured party's possession,

(1) reasonable expenses (including the cost of insurance and payment of taxes or other charges), incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;

(2) the risk of accidental loss or damage is on the debtor to the extent of a deficiency in effective insurance coverage;

(3) the secured party may hold as additional security an increase or profits (except money) received from the collateral, but money so received, unless remitted to the debtor, shall be applied in reduction of the secured obligation;

(4) the secured party must keep the collateral identifiable, but fungible collateral may be commingled;

(5) the secured party may repledge the collateral upon terms which do not impair the debtor's right to redeem it.

(c) A secured party is liable for a loss caused by the failure of the secured party to meet an obligation imposed by (a) and (b) of this section but does not lose the security interest.

(d) A secured party may use or operate the collateral

(1) to preserve the collateral or its value;

(2) under the order of a court of appropriate jurisdiction; or

(3) except in the case of consumer goods, in the manner and to the extent provided in the security agreement.