Kentucky Statutes 355.9-208 – Additional duties of secured party having control of collateral
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(1) This 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) Within ten (10) days after receiving an authenticated demand by the debtor:
(a) A secured party having control of a deposit account under KRS § 355.9-
104(1)(b) 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;
(b) A secured party having control of a deposit account under KRS § 355.9-
104(1)(c) 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;
(c) A secured party, other than a buyer, having control of electronic chattel paper under KRS § 355.9-105 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;
(d) A secured party having control of investment property under KRS § 355.8-
106(4)(b) or 355.9-106(2) 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;
(e) A secured party having control of a letter-of-credit right under KRS § 355.9-107 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
(f) 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 authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.
Effective: July 1, 2013
History: Amended 2012 Ky. Acts ch. 132, sec. 64, effective July 1, 2013. — Repealed and reenacted 2001 Ky. Acts ch. 119, sec. 5, effective July 1, 2001. — Repealed and reenacted 2000 Ky. Acts ch. 408, sec. 38, effective July 1, 2001. — Created 1958 Ky. Acts ch. 77, sec. 9-208, effective July 1, 1960.
Legislative Research Commission Note (3/14/2013). 2013 Ky. Acts ch. 10, secs. 2 and
3 provide that the statutes in Article 9 of the Uniform Commercial Code that were amended or created in 2012 Ky. Acts ch. 132, secs. 60 to 99, are effective July 1,
2013. This statute was one of those sections. Since only the effective date of a prior Act was altered, and not the text of the affected statutes, reference to 2013 Ky. Acts ch. 10 does not appear in the history for this statute.
Legislative Research Commission Note (7/12/2012). In 2010, the National Conference of Commissioners on Uniform State Laws and the American Law Institute proposed a Uniform Act for adoption by the states that contained revisions to Article 9 of the Uniform Commercial Code. The effective date for all proposed Article 9 revisions was to be July 1, 2013. Those revisions were enacted in 2012 Ky. Acts Chapter 132, Sections 60 to 99. Sections 60 to 90 contained the substantive Article 9 revisions, and Sections 91 to 99 contained the transitional Article 9 revisions created to handle secured transactions made prior to July 1, 2013. Section 91 of that Act (codified as KRS § 355.9-801) and Section 102 of that Act (a noncodified effective date provision) both stated, “Sections 91 to 99 of this Act take effect July 1, 2013.” The normal effective date for legislation enacted at the 2012 Regular Session of the General Assembly is July 12, 2012. In Opinion of the Attorney General 12-010, issued July 3,
2012, Section 91 (codified as KRS § 355.9-801) was determined to have contained a manifest clerical error, and should have instead read, “Sections 60 to 90 of this Act take effect July 1, 2013,” thereby making the substantive Article 9 revisions effective on the same date as the transitional Article 9 provisions in conformity with the 2010
Uniform Act proposal and 2012 Ky. Acts Chapter 132, Section 102. This statute was one of the substantive provisions of Article 9 contained in 2012 Ky. Acts Chapter
132, Sections 60 to 90.
(2) Within ten (10) days after receiving an authenticated demand by the debtor:
Terms Used In Kentucky Statutes 355.9-208
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Attorney: means attorney-at-law. See Kentucky Statutes 446.010
- Contract: A legal written agreement that becomes binding when signed.
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
- Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
(a) A secured party having control of a deposit account under KRS § 355.9-
104(1)(b) 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;
(b) A secured party having control of a deposit account under KRS § 355.9-
104(1)(c) 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;
(c) A secured party, other than a buyer, having control of electronic chattel paper under KRS § 355.9-105 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;
(d) A secured party having control of investment property under KRS § 355.8-
106(4)(b) or 355.9-106(2) 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;
(e) A secured party having control of a letter-of-credit right under KRS § 355.9-107 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
(f) 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 authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.
Effective: July 1, 2013
History: Amended 2012 Ky. Acts ch. 132, sec. 64, effective July 1, 2013. — Repealed and reenacted 2001 Ky. Acts ch. 119, sec. 5, effective July 1, 2001. — Repealed and reenacted 2000 Ky. Acts ch. 408, sec. 38, effective July 1, 2001. — Created 1958 Ky. Acts ch. 77, sec. 9-208, effective July 1, 1960.
Legislative Research Commission Note (3/14/2013). 2013 Ky. Acts ch. 10, secs. 2 and
3 provide that the statutes in Article 9 of the Uniform Commercial Code that were amended or created in 2012 Ky. Acts ch. 132, secs. 60 to 99, are effective July 1,
2013. This statute was one of those sections. Since only the effective date of a prior Act was altered, and not the text of the affected statutes, reference to 2013 Ky. Acts ch. 10 does not appear in the history for this statute.
Legislative Research Commission Note (7/12/2012). In 2010, the National Conference of Commissioners on Uniform State Laws and the American Law Institute proposed a Uniform Act for adoption by the states that contained revisions to Article 9 of the Uniform Commercial Code. The effective date for all proposed Article 9 revisions was to be July 1, 2013. Those revisions were enacted in 2012 Ky. Acts Chapter 132, Sections 60 to 99. Sections 60 to 90 contained the substantive Article 9 revisions, and Sections 91 to 99 contained the transitional Article 9 revisions created to handle secured transactions made prior to July 1, 2013. Section 91 of that Act (codified as KRS § 355.9-801) and Section 102 of that Act (a noncodified effective date provision) both stated, “Sections 91 to 99 of this Act take effect July 1, 2013.” The normal effective date for legislation enacted at the 2012 Regular Session of the General Assembly is July 12, 2012. In Opinion of the Attorney General 12-010, issued July 3,
2012, Section 91 (codified as KRS § 355.9-801) was determined to have contained a manifest clerical error, and should have instead read, “Sections 60 to 90 of this Act take effect July 1, 2013,” thereby making the substantive Article 9 revisions effective on the same date as the transitional Article 9 provisions in conformity with the 2010
Uniform Act proposal and 2012 Ky. Acts Chapter 132, Section 102. This statute was one of the substantive provisions of Article 9 contained in 2012 Ky. Acts Chapter
132, Sections 60 to 90.