Uniform Commercial Code Article 8
Security Interests in Federal Agency Book-Entry Securities: Doing It with Mirrors
Barry Lee Katzman, 42(1): 157–213 (Nov. 1986)
This Article probes the ambiguities of the federal regulations governing transfer and perfection of security interests in book-entry securities. Recent cases interpreting relevant provisions of U.C.C. Article 8 are criticized, and recommendations are provided for precautions in dealing in book-entry securities. A structure for revision of the current regulations is proposed. In a separate addendum, the U.S. Treasury Department's recent proposal for revised book-entry regulations is criticized, and comments on the proposal, submitted by the Ad Hoc Subcommittee on Uncertificated Securities and others, are reviewed.
First Report on Uncertificated Debt Securities, System Credit Risk and Sample Uncertificated Debt Indenture
Ad Hoc committee on Uncertificated Debt Securities , 46(3): 909–57 (May 1991)
The Section of Business Law created this committee to develop an indenture complying with the Trust Indenture Act of 1939, as amended, that would provide for the issuance of corporate debt securities in uncertificated form, as contemplated by the 1977 revisions to Article 8 of the U.C.C. The first Report of the committee was developed in conjunction with the sample Uncertificated Debt Indenture drafted by the committee. This Report describes the various systems of issuing securities presently in use and presents the committee's proposal for issuance of dematerialized corporate debt securities. The Report describes how corporate and municipal securities are held today, provides a short overview of the history of the U.C.C. Article 8 revisions, presents specifics of how the corporate debt- security system would work under the dematerialized approach, for example, payments, transfers, pledges, etc., sketches the approaches to immobilization and dematerialization taken in certain other countries, discusses certain forgery risks that would exist under the Sample Indenture, discusses mandatory immobilization and intermediary credit risk, and concludes by reviewing the partial impediments that impede full implementation of the 1977 revisions to Article 8.
A Model "Account Control Agreement" Under the New Article 8 of the Uniform Commercial Code
Howard Darmstadter, Sandra M. Rocks, and Steven O. Weise , 53(1): 139–55 (Nov. 1997)
The 1994 revisions of Article 8, "Investment Securities," and Article 9, "Secured Transactions," of the U.C.C. permit lenders to perfect security interests in a debtor's securities account by means of an agreement between the lender, the debtor, and the bank or broker-dealer with whom the securities account is maintained. This Article presents a model form for such an "account control agreement," with extensive annotations explaining how each provision fits into the new statutory scheme.
An Addendum for Protected Purchasers—U.C.C. Security Interest Opinions
TriBar Opinion committee, 54(3): 1261–69 (May 1999)
This most recent report of the TriBar Opinion committee updates the TriBar's 1993 report on security interest opinions in light of revised Article 8 of the U.C.C. U.C.C. Security Interest Opinions, 49 BUS. LAW. 359 (1993). Most states have repealed the bona fide purchaser provisions discussed in the 1993 report in favor of the new protected purchaser rules contained in revised Article 8 of the U.C.C. This new TriBar report updates the Article 8 discussion (and illustrative opinion) originally published in the 1993 report for use with opinions to be delivered under revised Article 8 of the U.C.C.
Initial Report of the Joint Task Force on Deposit Accounts Control Agreements
Joint Task Force on Deposit Account Control Agreements, ABA Section of Business Law, 61(2):745—796 (February 2006)
Void or Voidable?—Curing Defects in Stock Issuances Under Delaware Law
C. Stephen Bigler and Seth Barrett Tillman, 63(4): 1109-1152 (August 2008)
It is not unusual for a Delaware corporation's stock records to have omissions or procedural defects raising questions as to the valid authorization of some of the outstanding stock. Confronted with such irregularities, most corporate lawyers would likely attempt to cure the defect through board and, if necessary, stockholder ratification. However, in a number of leading cases, the Delaware Supreme Court has treated the statutory formalities for the issuance of stock as substantive prerequisites to the validity of the stock being issued, and the court has determined that failure to comply with such formalities renders the stock in question void, i.e., not curable by ratification. Unfortunately, the decisions issued by the Delaware courts have not afforded the necessary certainty to allow practitioners to decide whether a particular defect in stock issuance is a substantive defect that renders stock void or a mere technical defect that renders stock voidable. This Article analyzes the cases giving rise to this lack of clarity and proposes that the Delaware courts apply the policy underlying Article 8 of the Delaware Uniform Commercial Code to validate stock in the hands of innocent purchasers for value in determining whether stock is void or voidable.
How Safe Are Institutional Assets in a Custodial Bank’s Insolvency?
Edward H. Klees,68(1): 103 - 136 (November 2012)
It is a widely held belief among institutional investors that custody accounts are protected against a bank's insolvency in the United States. This assumption undergirds trillions of dollars of assets held in custody in U.S. banks. However, despite the 2008 financial crisis, little if any attention has been paid to analyzing whether this belief is, indeed, valid. This article argues that while the FDIC, as receiver of almost all failed banks in the United States, will likely protect custodied assets to the extent permitted by law, clients bear several significant legal and operational risks that could limit recovery of their custodied assets. While investors can protect against some risks, others may be outside their control. The article outlines these risks and proposes ameliorative steps for institutional investors.
Securities on Blockchain and the Uniform Commercial Code
Reade Ryan and Mayme Donohue; 73(1): 85-108 (Winter 2017/2018)
This article initially provides a high-level description of blockchain technology intended to be accessible to those without a technical background, and illustratively describes an existing blockchain system that already evidences securities issued and being traded. The article then sets forth and analyzes how Article 8 of the Uniform Commercial Code covers blockchain securities as “uncertificated securities.” Finally, the article provides guidance to corporate lawyers faced with giving a legal opinion relating to the issuance and sale of securities on a blockchain.