§ 25-9-617. Rights of transferee of collateral. - North Carolina Statutes

§25‑9‑617.  Rights of transferee of collateral.

(a)        Effects ofdisposition. – A secured party's disposition of collateral after default:

(1)        Transfers to atransferee for value all of the debtor's rights in the collateral;

(2)        Discharges thesecurity interest under which the disposition is made; and

(3)        Discharges anysubordinate security interest or other subordinate lien.

(b)        Rights of good‑faithtransferee. – A transferee that acts in good faith takes free of the rights andinterests described in subsection (a) of this section, even if the securedparty fails to comply with this Article or the requirements of any judicialproceeding.

(c)        Rights of othertransferee. – If a transferee does not take free of the rights and interestsdescribed in subsection (a) of this section, the transferee takes thecollateral subject to:

(1)        The debtor's rightsin the collateral;

(2)        The securityinterest or agricultural lien under which the disposition is made; and

(3)        Any other securityinterest or other lien. (1965, c. 700, s. 1; 1975, c. 862, s. 7; 2000‑169,s. 1.)