(810 ILCS 5/Art. 9 Pt. 2 Sub. 2 heading)
SUBPART 2.
RIGHTS AND DUTIES
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(810 ILCS 5/9-207) (from Ch. 26, par. 9-207)
Sec. 9-207. Rights and duties of secured party having possession or
control
of collateral.
(a) Duty of care when secured party in possession. Except as otherwise
provided in subsection (d), a secured party shall use reasonable care in the
custody
and preservation of collateral in the secured party's possession. In the case
of
chattel paper or an instrument, reasonable care includes taking necessary steps
to
preserve rights against prior parties unless otherwise agreed.
(b) Expenses, risks, duties, and rights when secured party in
possession. Except as otherwise provided in subsection (d), if a secured party
has
possession of collateral:
(1) reasonable expenses, including the cost of
| | insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;
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(2) the risk of accidental loss or damage is on the
| | debtor to the extent of a deficiency in any effective insurance coverage;
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(3) the secured party shall keep the collateral
| | identifiable, but fungible collateral may be commingled; and
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(4) the secured party may use or operate the
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(A) for the purpose of preserving the collateral
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(B) as permitted by an order of a court having
| | competent jurisdiction; or
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(C) except in the case of consumer goods, in the
| | manner and to the extent agreed by the debtor.
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(c) Duties and rights when secured party in possession or control.
Except as otherwise provided in subsection (d), a secured party having possession
of collateral or control of collateral under Section 7-106, 9-104, 9-105, 9-106, or 9-107:
(1) may hold as additional security any proceeds,
| | except money or funds, received from the collateral;
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(2) shall apply money or funds received from the
| | collateral to reduce the secured obligation, unless remitted to the debtor; and
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(3) may create a security interest in the collateral.
(d) Buyer of certain rights to payment. If the secured party is a buyer of
accounts, chattel paper, payment intangibles, or promissory notes or a
consignor:
(1) subsection (a) does not apply unless the secured
| | party is entitled under an agreement:
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(A) to charge back uncollected collateral; or
(B) otherwise to full or limited recourse against
| | the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and
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(2) subsections (b) and (c) do not apply.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-208) (from Ch. 26, par. 9-208)
Sec. 9-208. Additional duties of secured party having control of
collateral.
(a) Applicability of Section. 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.
(b) Duties of secured party after receiving demand from debtor.
Within 10 days after receiving an authenticated demand by the debtor:
(1) a secured party having control of a deposit
| | account under Section 9-104(a)(2) 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;
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(2) a secured party having control of a deposit
| | account under Section 9-104(a)(3) shall:
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(A) pay the debtor the balance on deposit in the
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(B) transfer the balance on deposit into a
| | deposit account in the debtor's name;
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(3) a secured party, other than a buyer, having
| | control of electronic chattel paper under Section 9-105 shall:
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(A) communicate the authoritative copy of the
| | electronic chattel paper to the debtor or its designated custodian;
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(B) 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
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(C) 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;
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(4) a secured party having control of investment
| | property under Section 8-106(d)(2) or 9-106(b) 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;
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(5) a secured party having control of a
| | letter-of-credit right under Section 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
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(6) a secured party having control of an electronic
| | (A) give control of the electronic document to
| | the debtor or its designated custodian;
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| (B) 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
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| (C) 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.
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| (Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-209)
Sec. 9-209.
Duties of secured party if account debtor has been notified of
assignment.
(a) Applicability of Section. Except as otherwise provided in subsection
(c), this Section applies if:
(1) there is no outstanding secured obligation; and
(2) the secured party is not committed to make
| | advances, incur obligations, or otherwise give value.
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(b) Duties of secured party after receiving demand from debtor.
Within 10 days after receiving an authenticated demand by the debtor, a secured
party shall send to an account debtor that has received notification of an
assignment
to the secured party as assignee under Section 9-406(a) an authenticated record
that
releases the account debtor from any further obligation to the secured party.
(c) Inapplicability to sales. This Section does not apply to an assignment
constituting the sale of an account, chattel paper, or payment intangible.
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-210)
Sec. 9-210.
Request for accounting; request regarding list of collateral
or
statement of account.
(a) Definitions. In this Section:
(1) "Request" means a record of a type described in
| | paragraph (2), (3), or (4).
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(2) "Request for an accounting" means a record
| | authenticated by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.
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(3) "Request regarding a list of collateral" means a
| | record authenticated by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship that is the subject of the request.
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(4) "Request regarding a statement of account" means
| | a record authenticated by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.
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(b) Duty to respond to requests. Subject to subsections (c), (d), (e), and
(f), a secured party, other than a buyer of accounts, chattel paper, payment
intangibles, or promissory notes or a consignor, shall comply with a request within
14 days after receipt:
(1) in the case of a request for an accounting, by
| | authenticating and sending to the debtor an accounting; and
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(2) in the case of a request regarding a list of
| | collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.
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(c) Request regarding list of collateral; statement concerning type of
collateral. A secured party that claims a security interest in all of a particular type
of collateral owned by the debtor may comply with a request regarding a list of
collateral by sending to the debtor an authenticated record including a statement to
that effect within 14 days after receipt.
(d) Request regarding list of collateral; no interest claimed. A person
that receives a request regarding a list of collateral, claims no interest in the
collateral when it receives the request, and claimed an interest in the collateral at an
earlier time shall comply with the request within 14 days after receipt by sending to
the debtor an authenticated record:
(1) disclaiming any interest in the collateral; and
(2) if known to the recipient, providing the name and
| | mailing address of any assignee of or successor to the recipient's interest in the collateral.
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(e) Request for accounting or regarding statement of account; no
interest in obligation claimed. A person that receives a request for an
accounting
or a request regarding a statement of account, claims no interest in the
obligations
when it receives the request, and claimed an interest in the obligations at an
earlier
time shall comply with the request within 14 days after receipt by sending to
the
debtor an authenticated record:
(1) disclaiming any interest in the obligations; and
(2) if known to the recipient, providing the name and
| | mailing address of any assignee of or successor to the recipient's interest in the obligations.
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(f) Charges for responses. A debtor is entitled without charge to one
response to a request under this Section during any six-month period. The
secured
party may require payment of a charge not exceeding $25 for each additional
response.
(Source: P.A. 91-893, eff. 7-1-01.)
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