§ 6A-9-615 Application of proceeds ofdisposition; liability for deficiency and right to surplus. – (a) Application of proceeds. A secured party shall apply or pay over forapplication the cash proceeds of disposition under § 6A-9-610 in thefollowing order to:
(1) The reasonable expenses of retaking, holding, preparingfor disposition, processing, and disposing, and, to the extent provided for byagreement and not prohibited by law, reasonable attorney's fees and legalexpenses incurred by the secured party;
(2) The satisfaction of obligations secured by the securityinterest or agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by anysubordinate security interest in or other subordinate lien on the collateral if:
(i) The secured party receives from the holder of thesubordinate security interest or other lien an authenticated demand forproceeds before distribution of the proceeds is completed; and
(ii) In a case in which a consignor has an interest in thecollateral, the subordinate security interest or other lien is senior to theinterest of the consignor; and
(4) A secured party that is a consignor of the collateral ifthe secured party receives from the consignor an authenticated demand forproceeds before distribution of the proceeds is completed.
(b) Proof of subordinate interest. If requested by asecured party, a holder of a subordinate security interest or other lien shallfurnish 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'sdemand under subsection (a)(3).
(c) Application of noncash proceeds. A secured partyneed not apply or pay over for application noncash proceeds of dispositionunder § 6A-9-610 unless the failure to do so would be commerciallyunreasonable. A secured party that applies or pays over for application noncashproceeds shall do so in a commercially reasonable manner.
(d) Surplus or deficiency if obligation secured. Ifthe security interest under which a disposition is made secures payment orperformance of an obligation, after making the payments and applicationsrequired by subsection (a) and permitted by subsection (c):
(1) Unless subsection (a)(4) requires the secured party toapply or pay over cash proceeds to a consignor, the secured party shall accountto 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 topayment. 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 toperson related to secured party. The surplus or deficiency following adisposition is calculated based on the amount of proceeds that would have beenrealized in a disposition complying with this part to a transferee other thanthe secured party, a person related to the secured party, or a secondaryobligor if:
(1) The transferee in the disposition is the secured party, aperson related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition issignificantly below the range of proceeds that a complying disposition to aperson other than the secured party, a person related to the secured party, ora secondary obligor would have brought.
(g) Cash proceeds received by junior secured party. Asecured party that receives cash proceeds of a disposition in good faith andwithout knowledge that the receipt violates the rights of the holder of asecurity interest or other lien that is not subordinate to the securityinterest or agricultural lien under which the disposition is made:
(1) Takes the cash proceeds free of the security interest orother lien;
(2) Is not obligated to apply the proceeds of the dispositionto the satisfaction of obligations secured by the security interest or otherlien; and
(3) Is not obligated to account to or pay the holder of thesecurity interest or other lien for any surplus.
§ 6A-9-615 Application of proceeds ofdisposition; liability for deficiency and right to surplus. – (a) Application of proceeds. A secured party shall apply or pay over forapplication the cash proceeds of disposition under § 6A-9-610 in thefollowing order to:
(1) The reasonable expenses of retaking, holding, preparingfor disposition, processing, and disposing, and, to the extent provided for byagreement and not prohibited by law, reasonable attorney's fees and legalexpenses incurred by the secured party;
(2) The satisfaction of obligations secured by the securityinterest or agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by anysubordinate security interest in or other subordinate lien on the collateral if:
(i) The secured party receives from the holder of thesubordinate security interest or other lien an authenticated demand forproceeds before distribution of the proceeds is completed; and
(ii) In a case in which a consignor has an interest in thecollateral, the subordinate security interest or other lien is senior to theinterest of the consignor; and
(4) A secured party that is a consignor of the collateral ifthe secured party receives from the consignor an authenticated demand forproceeds before distribution of the proceeds is completed.
(b) Proof of subordinate interest. If requested by asecured party, a holder of a subordinate security interest or other lien shallfurnish 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'sdemand under subsection (a)(3).
(c) Application of noncash proceeds. A secured partyneed not apply or pay over for application noncash proceeds of dispositionunder § 6A-9-610 unless the failure to do so would be commerciallyunreasonable. A secured party that applies or pays over for application noncashproceeds shall do so in a commercially reasonable manner.
(d) Surplus or deficiency if obligation secured. Ifthe security interest under which a disposition is made secures payment orperformance of an obligation, after making the payments and applicationsrequired by subsection (a) and permitted by subsection (c):
(1) Unless subsection (a)(4) requires the secured party toapply or pay over cash proceeds to a consignor, the secured party shall accountto 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 topayment. 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 toperson related to secured party. The surplus or deficiency following adisposition is calculated based on the amount of proceeds that would have beenrealized in a disposition complying with this part to a transferee other thanthe secured party, a person related to the secured party, or a secondaryobligor if:
(1) The transferee in the disposition is the secured party, aperson related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition issignificantly below the range of proceeds that a complying disposition to aperson other than the secured party, a person related to the secured party, ora secondary obligor would have brought.
(g) Cash proceeds received by junior secured party. Asecured party that receives cash proceeds of a disposition in good faith andwithout knowledge that the receipt violates the rights of the holder of asecurity interest or other lien that is not subordinate to the securityinterest or agricultural lien under which the disposition is made:
(1) Takes the cash proceeds free of the security interest orother lien;
(2) Is not obligated to apply the proceeds of the dispositionto the satisfaction of obligations secured by the security interest or otherlien; and
(3) Is not obligated to account to or pay the holder of thesecurity interest or other lien for any surplus.
§ 6A-9-615 Application of proceeds ofdisposition; liability for deficiency and right to surplus. – (a) Application of proceeds. A secured party shall apply or pay over forapplication the cash proceeds of disposition under § 6A-9-610 in thefollowing order to:
(1) The reasonable expenses of retaking, holding, preparingfor disposition, processing, and disposing, and, to the extent provided for byagreement and not prohibited by law, reasonable attorney's fees and legalexpenses incurred by the secured party;
(2) The satisfaction of obligations secured by the securityinterest or agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by anysubordinate security interest in or other subordinate lien on the collateral if:
(i) The secured party receives from the holder of thesubordinate security interest or other lien an authenticated demand forproceeds before distribution of the proceeds is completed; and
(ii) In a case in which a consignor has an interest in thecollateral, the subordinate security interest or other lien is senior to theinterest of the consignor; and
(4) A secured party that is a consignor of the collateral ifthe secured party receives from the consignor an authenticated demand forproceeds before distribution of the proceeds is completed.
(b) Proof of subordinate interest. If requested by asecured party, a holder of a subordinate security interest or other lien shallfurnish 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'sdemand under subsection (a)(3).
(c) Application of noncash proceeds. A secured partyneed not apply or pay over for application noncash proceeds of dispositionunder § 6A-9-610 unless the failure to do so would be commerciallyunreasonable. A secured party that applies or pays over for application noncashproceeds shall do so in a commercially reasonable manner.
(d) Surplus or deficiency if obligation secured. Ifthe security interest under which a disposition is made secures payment orperformance of an obligation, after making the payments and applicationsrequired by subsection (a) and permitted by subsection (c):
(1) Unless subsection (a)(4) requires the secured party toapply or pay over cash proceeds to a consignor, the secured party shall accountto 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 topayment. 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 toperson related to secured party. The surplus or deficiency following adisposition is calculated based on the amount of proceeds that would have beenrealized in a disposition complying with this part to a transferee other thanthe secured party, a person related to the secured party, or a secondaryobligor if:
(1) The transferee in the disposition is the secured party, aperson related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition issignificantly below the range of proceeds that a complying disposition to aperson other than the secured party, a person related to the secured party, ora secondary obligor would have brought.
(g) Cash proceeds received by junior secured party. Asecured party that receives cash proceeds of a disposition in good faith andwithout knowledge that the receipt violates the rights of the holder of asecurity interest or other lien that is not subordinate to the securityinterest or agricultural lien under which the disposition is made:
(1) Takes the cash proceeds free of the security interest orother lien;
(2) Is not obligated to apply the proceeds of the dispositionto the satisfaction of obligations secured by the security interest or otherlien; and
(3) Is not obligated to account to or pay the holder of thesecurity interest or other lien for any surplus.
