State of Illinois
90th General Assembly
Legislation

   [ Search ]   [ Legislation ]   [ Bill Summary ]
[ Home ]   [ Back ]   [ Bottom ]


[ Engrossed ]

90_HB0192

      810 ILCS 5/9-301          from Ch. 26, par. 9-301
          Amends the Uniform Commercial Code  to  provide  that  an
      unperfected security interest has priority over the rights of
      a lien creditor if the lien creditor is a trustee or receiver
      of a state or federally chartered financial institution and a
      security  interest  is  granted by the financial institution.
      Effective immediately.
                                                     LRB9001132KDcd
                                               LRB9001132KDcd
 1        AN ACT to amend the Uniform Commercial Code  by  changing
 2    Section 9-301.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section 5.  The Uniform Commercial  Code  is  amended  by
 6    changing Section 9-301 as follows:
 7        (810 ILCS 5/9-301) (from Ch. 26, par. 9-301)
 8        Sec.  9-301.  Persons  Who Take Priority Over Unperfected
 9    Security Interests; Rights of "Lien Creditor".
10        (1)  Except as otherwise provided in subsection  (2),  an
11    unperfected security interest is subordinate to the rights of
12             (a)  persons  entitled  to  priority  under  Section
13        9-312;
14             (b)  a person who becomes a lien creditor before the
15        security interest is perfected;
16             (c)  in  the  case of goods, instruments, documents,
17        and chattel paper, a person who is not  a  secured  party
18        and  who  is  a  transferee in bulk or other buyer not in
19        ordinary course  of  business  or  is  a  buyer  of  farm
20        products  in  ordinary  course of business, to the extent
21        that  he  gives  value  and  receives  delivery  of   the
22        collateral without knowledge of the security interest and
23        before it is perfected;
24             (d)  in  the  case of accounts, general intangibles,
25        and investment property, a person who is  not  a  secured
26        party and who is a transferee to the extent that he gives
27        value  without  knowledge  of  the  security interest and
28        before it is perfected;.
29    provided, however,  that  an  unperfected  security  interest
30    shall take priority over the rights of a lien creditor if (i)
31    the  lien  creditor  is  a  trustee or receiver of a state or
                            -2-                LRB9001132KDcd
 1    federally   chartered   financial   institution   acting   in
 2    furtherance of its supervisory  authority over the  financial
 3    institution  and  (ii)  a security interest is granted by the
 4    financial institution to secure a  deposit  of  public  funds
 5    with the financial institution or a repurchase agreement with
 6    the   financial   institution   pursuant  to  the  Government
 7    Securities Act of 1986, as amended.
 8        (2)  If  the  secured  party  files  with  respect  to  a
 9    purchase money security interest before  or  within  20  days
10    after  the  debtor  receives possession of the collateral, he
11    takes priority over the rights of a transferee in bulk or  of
12    a  lien  creditor  which  arise between the time the security
13    interest attaches and the time of filing.
14        (3)  A "lien creditor" means a creditor who has  acquired
15    a  lien  on  the property involved by attachment, levy or the
16    like and includes an assignee for benefit of  creditors  from
17    the  time of assignment, and a trustee in bankruptcy from the
18    date of the filing of the petition or a  receiver  in  equity
19    from the time of appointment.
20        (4)  A  person  who  becomes  a  lien  creditor  while  a
21    security  interest is perfected takes subject to the security
22    interest only to the extent that  it  secures  advances  made
23    before   he  becomes  a  lien  creditor  or  within  45  days
24    thereafter or made without knowledge of the lien or  pursuant
25    to a commitment entered into without knowledge of the lien.
26    (Source: P.A. 89-364, eff. 1-1-96.)
27        Section  99.  Effective date.  This Act takes effect upon
28    becoming law.

[ Top ]