TITLE 6

Commerce and Trade

SUBTITLE I

Uniform Commercial Code

ARTICLE 9. SECURED TRANSACTIONS

Part 7

Transition


This Act takes effect on July 1, 2001. References in this part to "this Act'' refer to the legislative enactment by which this part is added to Article 9 of the Uniform Commercial Code. References in this part to "former Article 9'' are to Article 9 of the Uniform Commercial Code as in effect immediately before this Act takes effect.

72 Del. Laws, c. 401, § 1.;

(a) Pre-effective-date transactions or liens. — Except as otherwise provided in this part, this Act applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before this Act takes effect.

(b) Continuing validity. — Except as otherwise provided in subsection (c) and Sections 9-703 through 9-709:

(1) transactions and liens that were not governed by former Article 9 of the Uniform Commercial Code, were validly entered into or created before this Act takes effect, and would be subject to this Act if they had been entered into or created after this Act takes effect, and the rights, duties, and interests flowing from those transactions and liens remain valid after this Act takes effect; and

(2) the transactions and liens may be terminated, completed, consummated, and enforced as required or permitted by this Act or by the law that otherwise would apply if this Act had not taken effect.

(c) Pre-effective-date proceedings. — This Act does not affect an action, case, or proceeding commenced before this Act takes effect.

72 Del. Laws, c. 401, § 1.;

(a) Continuing priority over lien creditor: perfection requirements satisfied. — A security interest that is enforceable immediately before this Act takes effect and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under this Act if, when this Act takes effect, the applicable requirements for enforceability and perfection under this Act are satisfied without further action.

(b) Continuing priority over lien creditor: perfection requirements not satisfied. — Except as otherwise provided in Section 9-705, if, immediately before this Act takes effect, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under this Act are not satisfied when this Act takes effect, the security interest:

(1) is a perfected security interest for one year after this Act takes effect;

(2) remains enforceable thereafter only if the security interest becomes enforceable under Section 9-203 before the year expires; and

(3) remains perfected thereafter only if the applicable requirements for perfection under this Act are satisfied before the year expires.

(c) Special transition provision regarding trusts and trustees. — If, immediately before this Act takes effect, a security interest against a debtor that is a trust or trustee is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but, pursuant to Section 9-503(a)(3)(dealing with the sufficiency of the name of the debtor in the case of trusts and trustees), the financing statement filed in this State prior to the date this Act takes effect naming the trust or trustee as the debtor would be ineffective under this Act solely because it does not sufficiently provide the name of the debtor, the financing statement remains effective to the same extent as under former Article 9 of the Uniform Commercial Code (and shall remain effective by filing continuation statements naming the debtor as in the financing statement to be continued) if (i) the trust is a trust created under the provisions of Chapter 38 of Title 12 (the Delaware Statutory Trust Act), (ii) the trust is a common law business trust, or (iii) a trustee of the trust is a corporation authorized under the laws of this State to exercise corporate trust powers.

72 Del. Laws, c. 401, § 1; 73 Del. Laws, c. 329, § 7.;

A security interest that is enforceable immediately before this Act takes effect but which would be subordinate to the rights of a person that becomes a lien creditor at that time:

(1) remains an enforceable security interest for one year after this Act takes effect;

(2) remains enforceable thereafter if the security interest becomes enforceable under Section 9-203 when this Act takes effect or within one year thereafter; and

(3) becomes perfected:

(A) without further action, when this Act takes effect if the applicable requirements for perfection under this Act are satisfied before or at that time; or

(B) when the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.

72 Del. Laws, c. 401, § 1.;

(a) Pre-effective-date action; one-year perfection period unless reperfected. — If action, other than the filing of a financing statement, is taken before this Act takes effect and the action would have resulted in priority of a security interest over the rights of a person that becomes a lien creditor had the security interest become enforceable before this Act takes effect, the action is effective to perfect a security interest that attaches under this Act within one year after this Act takes effect. An attached security interest becomes unperfected one year after this Act takes effect unless the security interest becomes a perfected security interest under this Act before the expiration of that period.

(b) Pre-effective-date filing. — The filing of a financing statement before this Act takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this Act.

(c) Pre-effective-date filing in jurisdiction formerly governing perfection. — This Act does not render ineffective an effective financing statement that, before this Act takes effect, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former Section 9-103. However, except as otherwise provided in subsections (d) and (e) and Section 9-706, the financing statement ceases to be effective at the earlier of:

(1) the time the financing statement would have ceased to be effective under the law of the jurisdiction in which it is filed; or

(2) June 30, 2006.

(d) Continuation statement. — The filing of a continuation statement after this Act takes effect does not continue the effectiveness of the financing statement filed before this Act takes effect. However, upon the timely filing of a continuation statement after this Act takes effect and in accordance with the law of the jurisdiction governing perfection as provided in Part 3, the effectiveness of a financing statement filed in the same office in that jurisdiction before this Act takes effect continues for the period provided by the law of that jurisdiction.

(e) Application of subsection (c)(2) to transmitting utility financing statement. — Subsection (c)(2) applies to a financing statement that, before this Act takes effect, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former Section 9-103 of the Uniform Commercial Code only to the extent that Part 3 provides that the law of a jurisdiction other than jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.

(f) Application of Part 5. — A financing statement that includes a financing statement filed before this Act takes effect and a continuation statement filed after this Act takes effect is effective only to the extent that it satisfies the requirements of Part 5 for an initial financing statement, except as provided in Section 9-703(c).

72 Del. Laws, c. 401, § 1.;

(a) Initial financing statement in lieu of continuation statement. — The filing of an initial financing statement in the office specified in Section 9-501 continues the effectiveness of a financing statement filed before this Act takes effect if:

(1) the filing of an initial financing statement in that office would be effective to perfect a security interest under this Act;

(2) the pre-effective-date financing statement was filed in an office in another State or another office in this State; and

(3) the initial financing statement satisfies subsection (c).

(b) Period of continued effectiveness. — The filing of an initial financing statement under subsection (a) continues the effectiveness of the pre-effective-date financing statement:

(1) if the initial financing statement is filed before this Act takes effect, for the period provided in former Section 9-403 with respect to a financing statement; and

(2) if the initial financing statement is filed after this Act takes effect, for the period provided in Section 9-515 with respect to an initial financing statement.

(c) Requirements for initial financing statement under subsection (a). — To be effective for purposes of subsection (a), an initial financing statement must:

(1) satisfy the requirements of Part 5 for an initial financing statement;

(2) identify the pre-effective-date financing statement by indicating the office in which the pre-effective-date financing statement was filed and providing the dates of filing and file numbers, if any, of the initial pre-effective-date financing statement and of the most recent continuation statement filed with respect to that financing statement; provided, that if the law of the jurisdiction governing perfection prior to the effective date of this act [June 28, 2005] required the filing of the pre-effective-date financing statement in both a central filing office and a local filing office, then an identification of the filing in the central filing office suffices for purposes of this subsection (c)(2) of this section; and

(3) indicate that the pre-effective-date financing statement remains effective.

72 Del. Laws, c. 401, § 1; 75 Del. Laws, c. 66, § 4.;

(a) Pre-effective-date financing statement. — In this section, "pre-effective-date financing statement'' means a financing statement filed before this Act takes effect.

(b) Applicable law. — After this Act takes effect, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Part 3. However, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.

(c) Method of amending: general rule. — Except as otherwise provided in subsection (d), if the law of this State governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after this Act takes effect only if:

(1) the pre-effective-date financing statement and an amendment are filed in the office specified in Section 9-501;

(2) an amendment is filed in the office specified in Section 9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies Section 9-706(c); or

(3) an initial financing statement that provides the information as amended and satisfies Section 9-706(c) is filed in the office specified in Section 9-501.

(d) Method of amending: continuation. — If the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under Section 9-705(d) and (f) or 9-706.

(e) Method of amending: additional termination rule. — Whether or not the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this State may be terminated after this Act takes effect by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies Section 9-706(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Part 3 as the office in which to file a financing statement.

72 Del. Laws, c. 401, § 1.;

A person may file an initial financing statement or a continuation statement under this part if:

(1) the secured party of record authorizes the filing; and

(2) the filing is necessary under this part:

(A) to continue the effectiveness of a financing statement filed before this Act takes effect; or

(B) to perfect or continue the perfection of a security interest.

72 Del. Laws, c. 401, § 1.;

(a) Law governing priority. — This Act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before this Act takes effect, former Article 9 of the Uniform Commercial Code determines priority.

(b) Priority if security interest becomes enforceable under Section 9-203. — For purposes of Section 9-322(a), the priority of a security interest that becomes enforceable under Section 9-203 of this Act dates from the time this Act takes effect if the security interest is perfected under this Act by the filing of a financing statement before this Act takes effect which would not have been effective to perfect the security interest under former Article 9 of the Uniform Commercial Code. This subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.

72 Del. Laws, c. 401, § 1.;