400.9-608. Application of proceeds of collection or enforcement--liability for deficiency and right to surplus.

MISSOURI STATUTES AND CODES

400.9-608. Application of proceeds of collection or enforcement--liability for deficiency and right to surplus.

Application of proceeds of collection or enforcement--liability fordeficiency and right to surplus.

400.9-608. (a) If a security interest or agricultural lien securespayment or performance of an obligation, the following rules apply:

(1) A secured party shall apply or pay over for application the cashproceeds of collection or enforcement under section 400.9-607 in thefollowing order to:

(A) The reasonable expenses of collection and enforcement and, to theextent provided for by agreement and not prohibited by law, reasonableattorney's fees and legal expenses incurred by the secured party;

(B) The satisfaction of obligations secured by the security interestor agricultural lien under which the collection or enforcement is made; and

(C) The satisfaction of obligations secured by any subordinatesecurity interest in or other lien on the collateral subject to thesecurity interest or agricultural lien under which the collection orenforcement is made if the secured party receives an authenticated demandfor proceeds before distribution of the proceeds is completed;

(2) If requested by a secured party, a holder of a subordinatesecurity interest or other lien shall furnish reasonable proof of theinterest or lien within a reasonable time. Unless the holder complies, thesecured party need not comply with the holder's demand under paragraph(1)(C);

(3) A secured party need not apply or pay over for applicationnoncash proceeds of collection and enforcement under section 400.9-607unless the failure to do so would be commercially unreasonable. A securedparty that applies or pays over for application noncash proceeds shall doso in a commercially reasonable manner;

(4) A secured party shall account to and pay a debtor for anysurplus, and the obligor is liable for any deficiency.

(b) If the underlying transaction is a sale of accounts, chattelpaper, payment intangibles, or promissory notes, the debtor is not entitledto any surplus, and the obligor is not liable for any deficiency.