O.C.G.A.
O.C.G.A.

O.C.G.A. § 11-9-615 (2019)

Application of proceeds of disposition; liability for deficiency and right to surplus

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)
Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
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(a) Application of proceeds. A secured party shall apply or pay over for application the cash proceeds of a disposition under Code Section 11-9-610 in the following order to:

(1) The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured party;

(2) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;

(3) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:

(A) The secured party receives from the holder of the subordinate security interest or other lien an authenticated demand for proceeds before distribution of the proceeds is completed; and

(B) In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and

(4) A secured party that is a consignor of the collateral if the secured party receives from the consignor an authenticated demand for proceeds before distribution of the proceeds is completed.

(b) Proof of subordinate interest. If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder’s demand under paragraph (3) of subsection (a) of this Code section.

(c) Application of noncash proceeds. A secured party need not apply or pay over for application noncash proceeds of a disposition under Code Section 11-9-610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(d) Surplus or deficiency if obligation secured. If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) of this Code section and permitted by subsection (c) of this Code section:

(1) Unless paragraph (4) of subsection (a) of this Code section requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and

(2) The obligor is liable for any deficiency.

(e) No surplus or deficiency in sales of certain rights to payment. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:

(1) The debtor is not entitled to any surplus; and

(2) The obligor is not liable for any deficiency.

(f) Calculation of surplus or deficiency in disposition to person related to secured party. The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this part to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if:

(1) The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and

(2) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.

(g) Cash proceeds received by junior secured party. A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:

(1) Takes the cash proceeds free of the security interest or other lien;

(2) Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and

(3) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.

History

Code 1981, § 11-9-615, enacted by Ga. L. 2001, p. 362, § 1.

Annotations

RESEARCH REFERENCES U.L.A. Uniform Commercial Code (U.L.A.) § 9615. ALR. Definition and Treatment of “Instru-

ments” Under Revised Article 9 of Uniform Commercial Code, 42 A.L.R.7th Art. 5.

Notes of Decisions
Cited in 6 cases, 2004–2014 · leading case: Motors Acceptance Corp. v. Rozier, 597 S.E.2d 367 (Ga. 2004).
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Motors Acceptance Corp. v. Rozier, 597 S.E.2d 367 (Ga. 2004). · cites it 2× “Under the UCC, a debtor’s rights also include: to demand that the creditor act with due care to preserve the collateral (OCGA § 11-9-207 (a)); to be notified before the creditor disposes of the collateral (OCGA §§ 11-9-611 to -614); to remittance of any surplus from sale of the…”
Sevostiyanova v. Tempest Recovery Servs., Inc., 705 S.E.2d 878 (Ga. Ct. App. 2011). · cites it 2× “However, a debtor or secondary obligor whose deficiency is eliminated or reduced under Code Section 11-9-626 may not otherwise recover under subsection (b) of this Code section for noncompliance with the provisions of this part relating to collection, enforcement, disposition,…”
Allen v. Santana, 695 S.E.2d 314 (Ga. Ct. App. 2010). · cites it 2× “, OCGA § 11-9-615 (d); Milam v. Adams, 216 Ga.”
Gwinnett Cmty. Bank v. Arlington Capital, LLC, 757 S.E.2d 239 (Ga. Ct. App. 2014). · cites it 2× “OCGA § 11-9-615 (e) provides in full: If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes: (1) The debtor is not entitled to any surplus; and (2) The obligor is not liable for any deficiency.”
Acme Sec., Inc. v. CLN Props., LLC ( In re Acme Sec., Inc.), 484 B.R. 475 (Bankr. N.D. Ga. 2012). · cites it 2× “14 See O.C.G.A. § 11-9-615. ALK would have been left with no assets to satisfy claims of CLN or any other creditors and, obviously, no business operations either.”
Gwinnett Cmty. Bank v. Arlington Capital, LLC (Ga. Ct. App. 2014). · cites it 2× “4 OCGA § 11-9-615 (e) provides in full, If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes: (1) The debtor is not entitled to any surplus; and (2) The obligor is not liable for any deficiency.”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.