§490:9-615  Application of proceeds of
disposition; liability for deficiency and right to surplus.  (a)  A secured
party shall apply or pay over for application the cash proceeds of disposition
under section 490:9-610 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)  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 subsection
(a)(3).



(c)  A secured party need not apply or pay over
for application noncash proceeds of disposition under section 490:9-610 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)  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) and permitted
by subsection (c):



(1)  Unless subsection (a)(4) 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)  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)  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)  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. [L 2000, c 241, pt of
§1; am L 2001, c 228, §§10, 11]