Additional Duties of Secured Party Having Control of Collateral

  1. Law
  2. Georgia Code
  3. Commercial Code
  4. Secured Transactions
  5. Effectiveness of Security Agreement; Attachment of Security Interest; Rights of Parties to Security Agreement
  6. Additional Duties of Secured Party Having Control of Collateral

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  1. Applicability of Code section. This Code section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations, or otherwise give value.
  2. Duties of secured party after receiving demand from debtor. Within ten days after receiving an authenticated demand by the debtor:
    1. A secured party having control of a deposit account under paragraph (2) of subsection (a) of Code Section 11-9-104 shall send to the bank with which the deposit account is maintained an authenticated statement that releases the bank from any further obligation to comply with instructions originated by the secured party;
    2. A secured party having control of a deposit account under paragraph (3) of subsection (a) of Code Section 11-9-104 shall:
      1. Pay the debtor the balance on deposit in the deposit account; or
      2. Transfer the balance on deposit into a deposit account in the debtor's name;
    3. A secured party, other than a buyer, having control of electronic chattel paper under Code Section 11-9-105 shall:
      1. Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;
      2. If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic chattel paper is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and
      3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;
    4. A secured party having control of investment property under paragraph (2) of subsection (d) of Code Section 11-8-106 or subsection (b) of Code Section 11-9-106 shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party;
    5. A secured party having control of a letter of credit right under Code Section 11-9-107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party; and
    6. A secured party having control of an electronic document shall:
      1. Give control of the electronic document to the debtor or its designated custodian;
      2. If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic document is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and
      3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authenticated copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.

(Code 1981, §11-9-208, enacted by Ga. L. 2001, p. 362, § 1; Ga. L. 2010, p. 481, § 2-22/HB 451.)

The 2010 amendment, effective May 27, 2010, deleted "and" at the end of paragraph (b)(4); substituted "; and" for a period at the end of paragraph (b)(5); and added paragraph (b)(6). See the Editor's notes for applicability.

Editor's notes.

- Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010.

Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.

RESEARCH REFERENCES

U.L.A.

- Uniform Commercial Code (U.L.A.) § 9-208.


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