Kentucky Statutes 355.9-323 – Future advances
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(1) Except as otherwise provided in subsection (3) of this section, for purposes of determining the priority of a perfected security interest under KRS § 355.9-322(1)(a), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:
(a) Is made while the security interest is perfected only:
1. Under KRS § 355.9-309 when it attaches; or
2. Temporarily under KRS § 355.9-312(5), (6), or (7); and
(b) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under KRS § 355.9-309 or
355.9-312(5), (6), or (7).
(2) Except as otherwise provided in subsection (3) of this section, a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than forty-five (45) days after the person becomes a lien creditor unless the advance is made:
(a) Without knowledge of the lien; or
(b) Pursuant to a commitment entered into without knowledge of the lien.
(3) Subsections (1) and (2) of this section do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.
(4) Except as otherwise provided in subsection (5) of this section, a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:
(a) The time the secured party acquires knowledge of the buyer’s purchase; or
(b) Forty-five (45) days after the purchase.
(5) Subsection (4) of this section does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchase and before the expiration of the forty-five (45) day period.
(6) Except as otherwise provided in subsection (7) of this section, a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:
(a) The time the secured party acquires knowledge of the lease; or
(b) Forty-five (45) days after the lease contract becomes enforceable.
(7) Subsection (6) of this section does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the forty-five (45) day period.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 63, effective July 1, 2001.
(a) Is made while the security interest is perfected only:
Terms Used In Kentucky Statutes 355.9-323
- Contract: A legal written agreement that becomes binding when signed.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
1. Under KRS § 355.9-309 when it attaches; or
2. Temporarily under KRS § 355.9-312(5), (6), or (7); and
(b) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under KRS § 355.9-309 or
355.9-312(5), (6), or (7).
(2) Except as otherwise provided in subsection (3) of this section, a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than forty-five (45) days after the person becomes a lien creditor unless the advance is made:
(a) Without knowledge of the lien; or
(b) Pursuant to a commitment entered into without knowledge of the lien.
(3) Subsections (1) and (2) of this section do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.
(4) Except as otherwise provided in subsection (5) of this section, a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:
(a) The time the secured party acquires knowledge of the buyer’s purchase; or
(b) Forty-five (45) days after the purchase.
(5) Subsection (4) of this section does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchase and before the expiration of the forty-five (45) day period.
(6) Except as otherwise provided in subsection (7) of this section, a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:
(a) The time the secured party acquires knowledge of the lease; or
(b) Forty-five (45) days after the lease contract becomes enforceable.
(7) Subsection (6) of this section does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the forty-five (45) day period.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 63, effective July 1, 2001.