2016 Kentucky Revised Statutes CHAPTER 355 - UNIFORM COMMERCIAL CODE Article 9 - Secured Transactions -- Sales of Accounts, Contract Rights, and Chattel Paper 355.9-330 Priority of purchaser of chattel paper or instrument.
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355.9-330 Priority of purchaser of chattel paper or instrument.
(1)
(2)
(3)
(4)
(5)
(6)
A purchaser of chattel paper has priority over a security interest in the chattel paper
which is claimed merely as proceeds of inventory subject to a security interest if:
(a) In good faith and in the ordinary course of the purchaser's business, the
purchaser gives new value and takes possession of the chattel paper or obtains
control of the chattel paper under KRS 355.9-105; and
(b) The chattel paper does not indicate that it has been assigned to an identified
assignee other than the purchaser.
A purchaser of chattel paper has priority over a security interest in the chattel paper
which is claimed other than merely as proceeds of inventory subject to a security
interest if the purchaser gives new value and takes possession of the chattel paper or
obtains control of the chattel paper under KRS 355.9-105 in good faith, in the
ordinary course of the purchaser's business, and without knowledge that the
purchase violates the rights of the secured party.
Except as otherwise provided in KRS 355.9-327, a purchaser having priority in
chattel paper under subsection (1) or (2) of this section also has priority in proceeds
of the chattel paper to the extent that:
(a) KRS 355.9-322 provides for priority in the proceeds; or
(b) The proceeds consist of the specific goods covered by the chattel paper or
cash proceeds of the specific goods, even if the purchaser's security interest in
the proceeds is unperfected.
Except as otherwise provided in KRS 355.9-331(1), a purchaser of an instrument
has priority over a security interest in the instrument perfected by a method other
than possession if the purchaser gives value and takes possession of the instrument
in good faith and without knowledge that the purchase violates the rights of the
secured party.
For purposes of subsections (1) and (2) of this section, the holder of a purchasemoney security interest in inventory gives new value for chattel paper constituting
proceeds of the inventory.
For purposes of subsections (2) and (4) of this section, if chattel paper or an
instrument indicates that it has been assigned to an identified secured party other
than the purchaser, a purchaser of the chattel paper or instrument has knowledge
that the purchase violates the rights of the secured party.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 70, effective July 1, 2001.
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