Wednesday, November 30, 2005

Abstract

I’ve said it before, but it bears repeating:  If you plan to practice law in Florida, you should be reading Abstract Appeal.  It is great.

http://abstractappeal.com/

Tuesday, November 29, 2005

Soda SOL

I was curious as to what the statute of limitations on refilling soda might be?  I go to the student union almost everyday and get a large soda from Subway.  The price is inflated -- $2.11 for a 32oz soda.  However, it is refillable.  Is there a time limitation as to how long one can refill?  A distance limit?

Some considerations:

     Is it strictly a time thing?  Meaning, if the union is open for 14 hours a day, are you free to refill for the entire 14 hours.  I think it is a given that once the place closes, the privilege to refill runs out (this leaves open the 24 hour places, but I would also state that going home also runs the privilege out).  It used to be as long as the cup could still hold liquid (those paper-wax-covered cups would die after several hours), however the cup I buy is plastic, and could last for the next 2 years of my time here.

       Is it based on proximity to the soda machine.  I think this can’t be the case.  The reason being:  the bathrooms are not in the food court.  This was the same for Miami as it is at Michigan.  In both places, you must leave the confines of the eating area to use the facilities.  At Miami, you actually had to walk outside.  So, if your proximity were the test, should you buy a cup and need to go to the bathroom, you would lose the privilege to refill far too soon.

     JD says it isn’t time nor proximity. She holds that it is the duration of the meal which governs the refill statute of limitation.  And, she contends that I abuse the system.  I say “hogwash”, because what if there is no meal?  What if you just buy a drink?  Then what governs the proper time to refill?

     Perhaps it should be a limit on the number of refills.  This seems like the best solution.  There could be a chart.  A penny to ounce formula of some kind.  $2.11 might buy 3 fills.  A potential 96oz of soda.  Should you choose to use ice, well, that is a fringe benefit you pay for in reduced soda ounces.

Term

Term of the month:  “Race to the bottom.”  I have heard this from several different people relating to several different topics.  

Monday, November 28, 2005

Better Check Possession

Okay, say you want to take a security interest on a widget.  You file a UCC1 on April 1st. Then, you wait.  On April 15th, you run a search on your debtor and see that your name is the only one that came back.  Sweet.  This means you are the first to file.  You then go and check on the widget to make sure no one has possession.  You see it in the possession of the debtor, hell, he even gives it to you to hold.  We are super secure now.  Right?  Wrong!

You better check possession when you file.  Picture this.  You file on April 1st, and someone other than the debtor has possession at that time (and an attached security interest, of course).   On the 9th, they file and return the item to the item to the debtor.  You know what that means, right?  They trump you!  Under 9-308(c), they have continued perfection without being unperfected, and so they go back before your April 1st filing.

Sucker.

Cans

I haven’t purchased a 12-pack of soda (or, pop as they say) since I got here.  This is because, although the 12-packs are only $1.97 each (quite a deal), they cost an extra $1.20 in deposit costs.  So, a $1.97 12-pack costs $3.17.  I know I can get the money back, but it isn’t practical.  One of the benefits of buying cans is that I can take them with me when I hit the road.  I can sip all the way to school, and then I can toss it out.  Where can I toss it?  Well, there are tons of recycling bins on campus, but if I use them, I don’t get my dime back.  Instead, the homeless guys who come on campus and collect the cans from these bins get my money.

The Hurt

Well, it seems the folks over in Miami are starting their exams at the end of the week. We have a couple weeks left before we start them here. I need those weeks. I’ll tell you what, this semester has blown by, and yet, it has put the hurt on me. It isn’t that the material I am studying is tougher, nor is the in-class workload, but the extra curricular stuff has piled on me. The biggest chunk of time was lost to callback interviews. Second to that was moot court. Then, law review note writing. And, of course, reading for class. There were a few assignments (one group assignment) due for class, but mostly just reading. Throw in figuring out my way around the school and the town as well. Could be worse. I haven’t had any weekend marathon make-up classes like the hurricane ravaged Hurricanes. I had my power uninterrupted (as far as I can tell) for the entire semester. I had cable, phone, and internet. The biggest stress comes from JD’s misery. She isn’t having a very swell time here as of yet. I have been non-existent at home. So, she is left to fend for herself with no friends or family to bop over to. To add insult to injury, I will be down south for the summer. This means I get to be with some friends and family while she sits around up here earning some money for us. I promised to fly her down as much as she wants, but I don’t think its helping. Alas. I’ll make it up to her with weekly massages and maid service when I’ve sold myself to the highest bidder when this is all over (let’s hope that last part doesn’t turn out true. Gulp!)

Saturday, November 26, 2005

Secured Transaction Policy?

UCC § 9-324(b):
(b) [Inventory purchase-money priority.] . . . a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, . . . also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if: (1) the purchase-money security interest is perfected when the debtor receives possession of the inventory; (2) the purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest; (3) the holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and (4) the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.
Okay, this section of Art. 9 has, as of yet in my review, given me the most pause for reflection. The book I am studying from tells me that this rule is much older than the UCC itself. It states that the reason an “inventory creditor” can take a PMSI that can prime an earlier creditor with interest in the inventory of a debtor is because, if not, the original creditor could become too powerful as to the ability of a debtor to do business. The idea being that no one would allow the debtor to buy on credit if they new that they were turning over inventory they would be unable to reposes because CreditorOne was first in line. Without this rule, a debtor would have to go to CreditorOne for more money in order to purchase the inventory, or it would need to get a release of that inventory so the inventory creditor could perfect a first-in-line security interest in it. Hence, without this rule, CreditorOne could say “no,” thus leaving debtor at their mercy in the conduct of its further business. The same policy animates a debtor’s ability to trump the first creditor’s interest in after-acquired equipment as well, when such equipment is bought on credit and PMSI’ed. However, there is no need to jump through the hoops (1-4 above) when PMSI’ing an equipment purchase. Why the difference between inventory and equipment? When dealing with equipment, I am guessing that the drafters assumed a growing collateral base. So, if debtor has 3 pieces of equipment which CreditorOne is secured by, the new equipment would be piece number 4--It could be an addition to CreditorOne's security. This would grow the creditor’s collateral. So, then, is CreditorOne any worse off should we let a new creditor trump the older creditor only on piece 4? The thought must be “no,” because CreditorOne still has pieces 1-3 as security, and now a second interest in piece 4. When we look at inventory, however, the thought must be different. Whereas equipment is more permanent, inventory is constantly turning over. This is why CreditorOne has what is referred to as “floating lien.” CreditorOne is being secured by constantly changing inventory. So, if the debtor decides he wants to extend new security interests in what is securing CreditorOne, the new creditor must alert CreditorOne of this fact. The reason for this rule is the same as the equipment reason—if debtor wants to keep his business running, he can’t be at the mercy of CreditorOne. Who, most likely, will not like that his security interest in the inventory is being gobbled up by new PMSI’ed interests. Hence, because turnover and new PMSI interests could quickly prime away all of CreditorOne’s security, the drafters require the steps of 1-4 (above) to be taken. This is where the theories all go to hell for me. Suppose that in the equipment context, the new equipment is to replace old equipment. Then CreditorOne, who was secured by three pieces, is now only secured (first-in-line) by two. Because, when debtor got the new equipment (piece number 4), he threw out (piece number 1). Here, the collateral base of CreditorOne is not grown, nor static, but rather, it has been reduced (2 and 3 only, instead of 1,2,3). So, like inventory, why not alert CreditorOne of this fact? This raises the question of what is the alert actually for, and the reality that such policy is almost always contracted around. It seems the inventory notification rules are required to keep the debtor honest. To protect itself (CreditorOne) from this sort of loss, there is probably some clause in the contract between CreditorOne and the debtor that any encumbrance of either the future inventory or equipment will be considered a default. If this is so, how is the policy behind 9-324 realized? If the PMSI’s are allowed in order to foster the business dealings of the debtor, alerting CreditorOne that its collateral is shrinking would lead to an alert of a breach. CreditorOne could then call (accelerate perhaps) its loans to the debtor. Is this anymore harmful than making debtor get CreditorOne’s permission to buy equipment or inventory in this way? I think calling the debt would be even worse. I must be missing something. I’ll think on it.

Thursday, November 17, 2005

Hello and Goodbye? What gives?

If anyone does stop by, I wanted to post a brief explanation as to why I am no longer guest blogging at “Equal Process.” On that blog, I posted this:
If anyone out there who happens to be a member of “Outlaw” or knows someone who is, can you tell me why the chapters throughout the American law schools have not joined forces and all signed up for JAG slots when they come to school to interview? What happened to throwing a wrench into the machine? Wouldn’t this effectively make their presence on campus useless? Every slot filled with people unable (not allowed) to join? The school would still get their funds. Sure, some people who really wanted to go to JAG would be screwed, but there are always collateral losses. Have movements become too nice?
Which can be found, picked up, at Discourse.net, here. Without notice or hearing, the post was removed from Equal Process by the blog’s owner. It was only my second post, and it certainly was not with keeping of my “transferring” posts. The internet is a free and open place, but that doesn’t mean that one can have his/her own way within someone else’s space in that free and open place. My posting was censored, well within the purview of the blog owner's right, and I had no assurance that further posts would not be. I, therefore, respectfully declined to post any further.