2000 Minnesota Statutes

     336.9-205 Use or disposition of collateral permissible. 

    (a)    When security interest not invalid or fraudulent. 
  A security interest is not invalid or fraudulent against 
 creditors solely because: 

    (1) the debtor has the right or ability to: 

    (A) use, commingle, or dispose of all or part of the 
 collateral, including returned or repossessed goods; 

    (B) collect, compromise, enforce, or otherwise deal with 
 collateral; 

    (C) accept the return of collateral or make repossessions; 
 or 

    (D) use, commingle, or dispose of proceeds; or 

    (2) the secured party fails to require the debtor to 
 account for proceeds or replace collateral. 

    (b)    Requirements of possession not relaxed.  This 
 section does not relax the requirements of possession if 
 attachment, perfection, or enforcement of a security interest 
 depends upon possession of the collateral by the secured party. 

    HIST: 2000 c 399 art 1 s 15 

*   NOTE:  This section, as added by Laws 2000, chapter 399, 
*article 1, section 15, is effective July 1, 2001.  Laws 2000, 
*chapter 399, article 1, section 130. 

*   NOTE:  Minnesota Statutes 1998, section 336.9-205, which 
*reads as follows, is repealed July 1, 2001.  Laws 2000, chapter 
*399, article 1, section 130. 

*   "336.9-205 Use or disposition of collateral without 
*accounting permissible. 

*   A security interest is not invalid or fraudulent against 
*creditors by reason of liberty in the debtor to use, commingle 
*or dispose of all or part of the collateral (including returned 
*or repossessed goods) or to collect or compromise accounts or 
*chattel paper, or to accept the return of goods or make 
*repossessions, or to use, commingle or dispose of proceeds, or 
*by reason of the failure of the secured party to require the 
*debtor to account for proceeds or replace collateral.  This 
*section does not relax the requirements of possession where 
*perfection of a security interest depends upon possession of the 
*collateral by the secured party or by a bailee."