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    The Business Lawyer

    Spring 2024 | Volume 79, Issue 2

    TriBar Report on Opinions Under 2022 Amendments to the Uniform Commercial Code Regarding Emerging Technologies

    TriBar Opinion Committee

    May 28, 2024

    42 min read

    Bankruptcy & Finance Commercial Transactions UCC Article 12, Controllable Electronic Records UCC Article 2 & 2A, Sales and Leases UCC Article 4, Bank Deposits and Collections UCC Article 9, Secured Transactions
    TriBar Report on Opinions Under 2022 Amendments to the Uniform Commercial Code Regarding Emerging Technologies
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    Abstract

    The 2022 amendments (the “Amendments”) to the Uniform Commercial Code (UCC) add a new Article 12 to the UCC and amend most of the other Articles of the UCC, in particular Article 9, to provide new and specific rules for sales of and security interests in certain types of digital assets.

    Examples of types of assets and transactions that the Amendments could cover are sales of and security interests in: electronic accounts, electronic payment intangibles, electronic (fiat) money, cryptocurrency (non-fiat), and certain non-fungible tokens (NFTs)

    This Report first reviews how sales of and security interests in these assets are handled under current law. It then summarizes the provisions of the Amendments likely to be addressed by legal opinion letters. The Report concludes with a discussion of opinions likely to be requested on sales and security interests covered by the Amendments.

    1. Introduction

    The 2022 amendments (the “Amendments”) to the Uniform Commercial Code (UCC) add a new Article 12 to the UCC and amend most of the other Articles of the UCC, in particular Article 9, to provide new and specific rules for sales of and security interests in certain types of digital assets. These rules are more precise and attuned to market expectations than the pre-Amendment UCC rules for these types of assets.

    Examples of types of assets and transactions that the Amendments could cover are sales of and security interests in:

    • Electronic accounts (generally including accounts receivable) and electronic payment intangibles (including electronic promises to pay akin to negotiable instruments and electronic loan agreements),
    • Electronic (fiat) money (government initiated and adopted),
    • Cryptocurrency (non‑fiat)
    • Certain non‑fungible tokens (NFTs).

    This Report first reviews how sales of and security interests in these assets are handled under current law. It then summarizes the provisions of the Amendments likely to be addressed by legal opinion letters. The Report concludes with a discussion of opinions likely to be requested on sales and security interests covered by the Amendments and provides illustrative opinion language and related stated and unstated assumptions.

    This Report supplements the TriBar 2003 Report on opinions under the 1999 revisions to Article 9 of the UCC.

    2. The UCC Before the Amendments

    The UCC before the Amendments does not specifically and comprehensively address the types of digital assets addressed by the Amendments. Thus, many transactions in which these types of assets are used as collateral adopt workaround approaches. One common approach is based on UCC Article 8:

    • The digital assets are transferred to a securities intermediary,
    • The securities intermediary agrees to treat the digital assets as “financial assets” and credits them to the debtor’s securities account, thereby creating a security entitlement with respect to the financial asset, with the debtor as the entitlement holder, and
    • The secured party then obtains “control” of the security entitlement, which perfects the secured party’s security interest in the security entitlement.

    Another, although less common, approach taken under pre-Amendment law is:

    • The debtor provides to the secured party the private key for an asset maintained on a distributed ledger,
    • The secured party transfers the asset to the secured party’s “wallet,” and
    • The secured party files a financing statement to perfect its security interest.

    Neither of these approaches provides the securities intermediary (in the first approach) or the secured party (in the second approach) legal assurance that the debtor held the digital asset free of other property claims or that the securities intermediary or the secured party will acquire the digital asset free of other property claims. This creates legal uncertainty, which the Amendments resolve with rules providing assurance that:

    • the securities intermediary and the secured party can acquire their interests free of the property claims of others, and
    • the secured party’s security interest will be eligible for super‑priority status.

    3. Summary of the UCC Amendments

    3.1. Introduction

    The Amendments provide rules for transfers of “controllable electronic records” (CERs), controllable accounts, and controllable payment intangibles to buyers and secured parties. Under the Amendments, a transferee of this type of property takes free of a property claim to the CER, controllable account, and controllable payment intangible if the transferee is a “qualifying purchaser.” In addition, under the Amendments a secured party that obtains control of the CER has priority over another secured party that does not have control, including a secured party that has earlier perfected its security interest only by the filing of a financing statement. None of these rules exist under current law.

    The definition of CER excludes certain types of assets, even if they would otherwise meet the definition of a CER:

    • Money (fiat),
    • Investment property,
    • Electronic accounts and electronic payment intangibles,
    • An electronic copy of a record evidencing chattel paper,
    • “Transferable records” under the Uniform Electronic Transactions Act (UETA) and the Electronic Signature in Global Commerce Act (E‑SIGN), and
    • Documents of title under UCC Article 7.

    3.2. New Article 12—Controllable Electronic Records

    Article 12 is selective in its application, applying only to particular issues (described below) related to outright transfers of and security interests in CERs, controllable accounts, and controllable payment intangibles. As discussed below, many of the terms and concepts used in Article 12 also apply to the Amendments applicable to other parts of the UCC.

    (i) Controllable electronic records

    Each word in the phrase “controllable electronic record” is important. Analyzing the definition is easiest reading from right to left:

    • A CER must first be a “record,” which is information stored in some manner and retrievable in perceivable form,
    • The record must be “electronic,” and
    • The electronic record must be “controllable.”

    A non‑fungible token (NFT) can be a CER if it meets the definition of “CER.” An NFT often is referred as being “tethered” or “linked” to one or more other assets such that the transfer of the NFT without more also transfers an interest in the other asset. The Amendments do not address whether the transfer of a CER to which another asset is “tethered” or “linked” has any effect on the tethered or linked asset, except for controllable accounts and controllable payment intangibles that are evidenced by a CER, which are discussed in more detail below. For other kinds of tethered or linked assets, other law, not Article 12, governs the effect of the transfer of the CER on the tethered asset.

    (ii) Controllable accounts and controllable payment intangibles

    The UCC broadly addresses rights to payment and classifies them in different ways depending on the nature of the transaction under which the right to payment arises, the nature and scope of any collateral, and the way the right to payment is evidenced (if the way is evidenced at all). Sometimes different rules apply to the different classifications. For example, a right to payment might arise out of a sale of goods. That right to payment would likely be an “account” (including a “controllable account”), “chattel paper” (including chattel paper evidenced by an electronic record), or an “instrument” (including a “promissory note”).

    The Amendments build on these rules. A controllable account or a controllable payment intangible is an “account” or “payment intangible” that:

    • Is evidenced by a CER and
    • Provides that it is payable to the person in control of the CER that evidences the controllable account or controllable payment intangible.

    (iii) Control

    For a person to have “control,” that person must have each of the following powers:

    • The power to avail itself of “substantially all” of the “benefits” of the electronic record,
    • The “exclusive” power to prevent others from enjoying “substantially all” of the benefits of the electronic record,
    • The “exclusive” power to transfer control or to cause another person to obtain control of the electronic record, and
    • The power readily to identify itself as having these powers.

    The term “exclusive,” in some circumstances, does not prohibit more than one person from having the relevant power. A power is still “exclusive” even if the power is “shared” (as defined in Article 12) with another person. When a relevant power is “shared” the power remains “exclusive,” except in stated circumstances. A power is not “shared” in the relevant sense with another person and therefore is not “exclusive” as defined in Article 12 if:

    • The person asserting “control” can exercise the power only if the other person also exercises the power, and
    • The other person can exercise the power without the exercise of the power by the person asserting control or the other person is the transferor of an interest in the CER to the first person.

    Because of the difficulty of proving that another person does not exist who has this power, Article 12 provides a presumption that a person who has the power has it “exclusively.”

    A person may have control through another person who has control if the other person acknowledges that it has control on behalf of the first person.

    A person has control of a controllable account or a controllable payment intangible only if the person obtains control of the CER that evidences the controllable account or controllable payment intangible.

    (iv) “Take free” rule

    Article 12 applies to outright transfers of and security interests in CERs, controllable accounts, and controllable payment intangibles. Article 12 provides to these types of assets many of the characteristics of negotiability that the UCC did not provide to them before the Amendments.

    A person who purchases a CER acquires all rights in the CER (and any controllable account or controllable payment intangible evidenced by the CER) that the transferor had or had the power to transfer. This is often referred to as the “shelter” principle. In addition, under the “take‑free” rule, a “qualifying purchaser” takes its interest in a CER, controllable account, or controllable payment intangible (as applicable) “free” of any property claim to the asset.

    A “qualifying purchaser” is a person who:

    • Acquires a CER in a transaction that constitutes a “purchase,”
    • Has control of the CER,
    • Gives value,
    • Acts in good faith, and
    • Does not have notice of a claim of a property right in the CER.

    As discussed above, a person obtains control of a controllable account or a controllable payment intangible only by obtaining control of the CER that evidences the controllable account or controllable payment intangible. Correspondingly, a person is a qualifying purchaser with respect to a controllable account or controllable payment intangible only if the person has control of the CER that evidences the controllable account or controllable payment intangible.

    Under the shelter principle, a purchaser who acquires a CER (or a controllable account or controllable payment intangible) from a qualifying purchaser acquires all rights in the CER (or the controllable account or controllable payment intangible) that the qualifying purchaser had or had the power to transfer. Therefore, the purchaser acquires the CER (or the controllable account or controllable payment intangible) free of any property claim in the CER (or the controllable account or controllable payment intangible) that preceded the acquisition of the CER by the qualifying purchaser, even if the purchaser from the qualifying purchaser would itself not satisfy the requirements for being a “qualifying purchaser.”

    (v) Choice of law

    The law of the “controllable electronic record’s jurisdiction” applies to matters “covered” by Article 12. The “controllable electronic record’s jurisdiction” is the first of the following to apply (in the order stated):

    • The jurisdiction “expressly” provided for in the CER or a record logically associated with the CER as the “controllable electronic record’s jurisdiction,”
    • The jurisdiction “expressly” provided for by the system in which the CER is recorded as the “controllable electronic record’s jurisdiction,”
    • The jurisdiction “expressly” provided for in the CER or a record logically associated with the CER as the “jurisdiction” that governs the CER generally,
    • The jurisdiction “expressly” provided for by the system in which the CER is recorded as the “jurisdiction” that governs the CER generally,
    • Washington, DC, if the Amendments are in effect in Washington, DC, or
    • Washington, DC, as if Washington, DC has adopted Article 12 and the conforming amendments to the other articles of the UCC, and they are in effect in Washington, DC.

    The law of the jurisdiction that governs a CER generally also governs the perfection, effect of perfection and nonperfection, and priority of a security interest in a CER, with one exception, as discussed below.

    At least for the near term, many CERs do not and will not have “express[]” provisions as described in the first four elements in the waterfall:

    Many controllable electronic records, attached or logically associated records, and systems in which controllable electronic records are recorded that exist at the time of the 2022 Amendments do not identify the “controllable electronic record’s jurisdiction” or the governing law (some permissioned systems being exceptions).

    As a result, the last two elements of the waterfall will frequently apply to CERs. Because the Amendments are likely to be in effect soon in the District of Columbia, the next-to-last element of the waterfall likely will soon be the relevant provision in many jurisdictions. This probability, along with the inherent difficulty of determining the CER’s jurisdiction, make it appropriate to include all express assumption in an opinion letter on control (as described below).

    3.3. Revisions to Article 9—CERs, Controllable Accounts, and Controllable Payment Intangibles

    (i) Attachment of a security interest

    The Amendments make only a few changes in the rules governing attachment of a security interest in a CER, a controllable account, or a controllable payment intangible. The assets subject to Article 9 affected by the Amendments fall within the following types of collateral, which the Amendments do not change:

    • CER – “general intangible”
    • Controllable account – “account”
    • Controllable payment intangible – “payment intangible.”

    Thus, a collateral description in the transaction documents does not need to be changed to grant a security interest in a CER, controllable account, or controllable payment intangible.

    (ii) Perfection of a security interest in a CER, controllable account, or controllable payment intangible

    A security interest in a CER, a controllable account, and a controllable payment intangible can be perfected by the filing of a financing statement or by control. A sale of a controllable payment intangible, as with the sale of any payment intangible, is automatically perfected. Although Article 12 can apply to the sale of a CER, Article 9 does not apply to a sale of a CER (although a CER is a “general intangible,” it cannot be a payment intangible). As amended, however, Article 9 incorporates the Article 12 definition of “control” (discussed above) for CERs, controllable accounts, and controllable payment intangibles when Article 9 applies to a transaction involving those types of assets.

    (iii) Priority of a security interest in a CER, controllable account, or controllable payment intangible

    A security interest in a CER, controllable account, and controllable payment intangible perfected by “control” of a CER (and any controllable account or controllable payment intangible evidenced by the CER) has priority over a security interest not perfected by control. Unlike the qualifying purchaser provision of Article 12, this Article 9 priority is not conditioned on the secured party’s not having notice of someone else’s property claim to the collateral.

    (iv) Choice of law for perfection, the effect of perfection and nonperfection, and the priority security interests in CERs

    The choice‑of‑law rule that applies to CERs, controllable accounts, and controllable payment intangibles for matters covered by Article 12 also applies to perfection, the effect of perfection and nonperfection, and the priority of a security interest in a (i) CER and (ii) controllable account or controllable payment intangible evidenced by the CER, except for the perfection of a security interest in a CER, controllable account, or controllable payment intangible by the filing of a financing statement. Perfection of a security interest in a CER (a general intangible), controllable account, or controllable payment intangible by filing a financing statement is governed by the pre-Amendment rule, which applies the law of the “location” of the debtor. However, even for a security interest in a CER, controllable account, and controllable payment intangible perfected by the filing of a financing statement (where perfection is governed by the law of the “location” of the debtor), the effect of perfection and nonperfection and the priority of the security interest is governed by the controllable electronic record’s jurisdiction (even in the absence of control).

    Choice‑of‑law issues call for particular attention when preparing an opinion on the perfection by control of a security interest in a CER, controllable account, or controllable payment intangible.The applicability of the Amendments’ requirements for perfection by control depends on whether the Amendments are in effect in the forum jurisdiction and the jurisdiction whose law is applied (by the court in the forum jurisdiction applying the forum’s choice‑of‑law rules) to the particular issue. Even if the Amendments are not in effect in the forum jurisdiction, the Amendments may apply to the transaction under the forum’s choice-of-law rules. For example:

    • If litigation is pending in a jurisdiction where the Amendments are not in effect, the forum court would not classify the CER as a “CER” and instead would classify the CER as an ordinary “general intangible”; if the debtor is “located” in Delaware (where the Amendments are in effect), the forum court would then apply Delaware law to characterization and related issues, the forum court (applying Delaware law) would classify the CER as a “CER,” and the Amendments would apply to, for example, control of the CER (without regard to the CER’s jurisdiction).
    • Conversely, if litigation is pending in a jurisdiction where the Amendments are in effect, the forum court would classify the CER as a “CER,” apply the law of the CER’s jurisdiction to characterization, perfection, and related issues, and, if the Amendments are not in effect in the CER’s jurisdiction, the forum court would then apply the law of the CER’s jurisdiction (which does not recognize the concept of a CER) and the Amendments would not apply, for example, to control of the CER.

    The treatment of these choice-of-law rules in an opinion letter is discussed below.

    3.4. Revisions to Article 9—Money

    (i) General Meaning of “money”

    The Amendments revise the Article 1 definition of money. Under the new Article 1 definition the asset must be a “medium of exchange,” and the “medium of exchange” must have been adopted or authorized by a government as a medium of exchange. The Amendments to Article 9 narrow the new Article 1 definition of “money” for purposes of transactions covered by Article 9 (described below).

    The term “money” (as defined in Article 1) does not include an electronic record that “existed” before the electronic record was adopted or authorized by a government as a medium of exchange. Thus, under the revised Article 1 definition of money, existing types of cryptocurrency (including bitcoin) are not and can never be “money” under the UCC because they existed before any government adopted them as money (but existing cryptocurrencies can still be CERs).

    The definitions in the UCC (pre– and post Amendment) of “account,” “negotiable instrument,” “instrument,” “promissory note,” “chattel paper,” and “payment intangible” each apply to a “right to payment” and require that the right to payment be a “monetary obligation.” The term “monetary” is derived from the definition of “money” in Article 1 (not the narrower definition in Article 9). Consequently, if an obligor cannot be required by the obligee to pay an obligation in “money,” then the obligation is not a “monetary obligation,” and therefore is not one of the types of property listed in the first sentence of this paragraph. Instead, in that circumstance the obligation would be a “general intangible.”

    As a result, in that circumstance:

    • Any description of a non‑monetary obligation as collateral in a security agreement or indication of collateral in a financing statement should refer to a “general intangible” or use another appropriate term.
    • Because the obligation would not be an “account” or a “payment intangible,” it cannot be a “controllable account” or a “controllable payment intangible.”
    • Because the obligation cannot be an “instrument,” “promissory note,” or “chattel paper,” even if evidenced by a relevant writing, a security interest in that obligation could not be perfected by possession.
    • Because the obligation cannot be a “payment intangible,” the “automatic” perfection rule of UCC § 9‑309(a)(3) for sales of payment intangibles would not apply.
    • Nor does Article 9 apply to a sale of a general intangible (that is not a payment intangible).

    (ii) Meaning of “money” under Article 9

    Article 9’s definition of “money” limits the Article 1 definition of “money” for purposes of Article 9:

    • Central bank digital currency (CBDC) in the form of a deposit account can be “money” under the Article 1 definition but is not “money” for purposes of Article 9. CBDC in the form of a deposit account is instead treated for Article 9 purposes as a “deposit account.”
    • An electronic record that is “money” under the Article 1 definition is not “money” for purposes of Article 9 if it is not “controllable.” Article 9 refers to money in electronic form that is controllable as “electronic money.” Thus (as described below), money in electronic form that is not controllable will not be subject to the perfection procedures either for tangible money or “electronic money.” Instead, money in electronic form that is not controllable will be a “general intangible.”

    (iii) Perfection of a security interest in electronic money

    A security interest in tangible money as original collateral can be perfected only by possession of the money (as under current law). A security interest in “electronic money” as original collateral can be perfected only by control.

    (iv) Priority of a security interest in electronic money

    The pre-Amendments UCC’s “take free” rules for transferees of money who are not in collusion with the debtor (the transferor) have been expanded to apply to electronic money in a manner similar to their application to tangible money. The effect of this is that a security interest in money that is perfected by control generally has priority over a security interest that is not perfected by control.

    (v) Choice of law for electronic money

    The UCC provides no special choice‑of‑law rule for the perfection, the effect of perfection and nonperfection, and priority of a security interest in electronic money. Consequently, Article 9’s default rule that the law of the debtor’s “location” applies (unless preempted by federal law).

    3.5. Revisions to Article 9—Chattel Paper

    (i) Definition of chattel paper

    The Amendments clarify that the definition of “chattel paper” refers to the right to payment of a “monetary obligation” evidenced by a record. The definition no longer refers to the nature of the record evidencing that right to payment. To reflect that clarification (along with the other elements of the definition), the Amendments eliminate the defined terms “tangible chattel paper” and “electronic chattel paper.” The nature of the record evidencing the chattel paper affects the method of perfection and the priority of a security interest in chattel paper.

    The Amendments also clarify the definition of “chattel paper” for hybrid transactions—i.e., transactions involving both (i) a right to payment secured by specific goods or a lease of goods and (ii) other transactions, such as the sale of services or the license of specific intellectual property. In a hybrid transaction, the term “chattel paper” applies to (i) a monetary obligation secured by goods only if the “specific goods” subject to the security interest are the “primary” collateral and (ii) a lease of goods only if the “predominant” purpose of the lease transaction relates to the possession and use of specific goods. If the transaction does not create “chattel paper,” then the payment obligation will probably be an account and the Article 9 rules governing “accounts” (including controllable accounts) (rather than “chattel paper”) would apply.

    (ii) Perfection by control of a security interest in chattel paper where there is an electronic record evidencing the chattel paper

    The Amendments provide for an additional method of “control” to perfect a security interest in chattel paper where there is an electronic copy of a record evidencing the chattel paper. The new method of “control” has a definition, sharing rules, a presumption of exclusivity, and a provision for control through another person comparable to the provisions relating to the meaning of control for a CER in Article 12.

    If there are both a tangible copy of a record evidencing the chattel paper and an electronic record evidencing the chattel paper, the secured party can still perfect its interest in the chattel paper (without filing a financing statement) but only by the secured party’s both possessing each authoritative tangible copy of the record evidencing the chattel paper and obtaining control of each authoritative electronic copy of the electronic record evidencing the chattel paper.

    (iii) Perfection by control of a security interest in chattel paper through a third person where there is an electronic record evidencing the chattel paper

    The Amendments add provisions that confirm that a secured party can perfect a security interest in chattel paper by control through a third party in control if the third party “acknowledges that it has control on behalf of ” the secured party.

    (iv) Priority

    A security interest in chattel paper perfected by control of the electronic copy of a record evidencing the chattel paper ordinarily has priority over a security interest not perfected by control.

    (v) Choice of law for perfection by control of a security interest in chattel paper where there is an electronic record evidencing the chattel paper

    The law of the “chattel paper’s jurisdiction” governs the perfection, the effect of perfection and non‑perfection, and priority of a security interest in all chattel paper (however evidenced) except (i) when the security interest is perfected by the filing of a financing statement (in which case the law of the debtor’s location governs perfection by the filing of a financing statement) or (ii) when the only record evidencing the chattel paper is tangible. The “chattel paper’s jurisdiction” (if one exists) is the first of the following (in the order stated) to apply:

    • The jurisdiction “expressly” provided for as the “chattel paper’s jurisdiction” in the authoritative electronic copy of the record evidencing the chattel paper or a record logically associated with the authoritative electronic copy of the record evidencing the chattel paper,
    • The jurisdiction “expressly” provided for as the “chattel paper's jurisdiction” by the system in which the electronic copy of the record evidencing the chattel paper is recorded,
    • The jurisdiction “expressly” provided for in the authoritative electronic copy of the record evidencing the chattel paper or a record logically associated with the chattel paper as the “jurisdiction” that governs the chattel paper generally,
    • The jurisdiction “expressly” provided for by the system in which the authoritative electronic copy of the record evidencing the chattel paper is recorded as the “jurisdiction” that governs the chattel paper generally, or
    • The location of the debtor.

    3.6. Additional Revisions to Definitions in Article 1

    The Amendments update the definition of the term “conspicuous” in Article 1 to take into account emerging technologies. The pre-Amendments definition contains examples of what satisfies the requirements of the definition (e.g., ALL CAPS or bold). The revised definition drops the examples and instead uses a “totality of the circumstances” concept.

    The Amendments revise the definition of the word “sign” to include electronic signatures and expand the use of that term.

    3.7. Transition Rules

    (i) General rule

    The general rule is that the Amendments take immediate effect when adopted and are in effect under a jurisdiction’s regular rules for when legislation goes into effect. Because the Amendments do not have the same effective date in every U.S. jurisdiction, the choice‑of‑law rules (discussed above) will be important in determining which jurisdiction’s transition rules apply.

    (ii) Established priorities

    The Amendments provide for an “adjustment date,” which is the later of July 1, 2025, and one year following that state’s effective date. Any priority “established” before the effective date in a jurisdiction will continue in place under that state’s law until the adjustment date. After the adjustment date, the new priority rules will apply even to transactions completed and priorities “established” before the effective date. Thus, as shown in the examples below, a secured party with “control” can (sooner or later) obtain priority over a secured party that before the effective date had perfected only by the filing of a financing statement.

    (iii) Examples

    Here are two examples:

    • Example 1:
    • Before the effective date, Secured Party 1 perfects a security interest in the debtor’s accounts and payment intangibles by filing a financing statement, which indicates the collateral is “accounts” and “payment intangibles.” The accounts and payment intangibles are evidenced by what would be a CER if the Amendments were then in effect and include an agreement to pay the person in “control” of the CER that evidences the accounts and payment intangibles. Thus, if the Amendments were then in effect, the accounts and payment intangibles would be controllable accounts and controllable payment intangibles. Before the effective date and after Secured Party 1 files its financing statement, Secured Party 2 perfects its security interest in the same collateral, also by filing a financing statement. Secured Party 2 also takes actions that would give it “control” of the CER that evidences the controllable accounts and controllable payment intangibles if the new law were then in effect. The “control” actions do not (yet) perfect the security interest by control because the Amendments are not yet in effect. Secured Party 1 has “established” its priority over Secured Party 2 before the effective date based on the sequence of the filing of the respective financing statements.
    • On the effective date, the Amendments become effective and Secured Party 2 then immediately has “control” of its collateral and its security interest is perfected by control (as well as by the pre‑effective date filing of a financing statement). Under the Amendments, Secured Party 2’s perfection by control ordinarily would have priority over Secured Party 1’s security interest (perfected only by the filing of a financing statement). However, because before the effective date Secured Party 1 “established” its priority by filing a financing statement (the only available method at that time) and Secured Party 1 then had priority over Secured Party 2 (who perfected by the later filing of a financing statement), Secured Party 1 is still senior to Secured Party 2 after the effective date because their relative priority was “established” before the effective date.
    • Beginning on the adjustment date, Secured Party 2 will then obtain priority over Secured Party 1 under the new rules because Secured Party 2 has “control” under the new rules and Secured Party 1 does not.
    • Example 2:
    • Before the effective date, Secured Party 1 perfects a security interest in a CER by filing a financing statement. No other person claims a security interest in the CER before the effective date. Secured Party 1 has not “established” priority before the effective date because no other secured party then exists who has a competing security interest in the same CER. After the effective date (but before the adjustment date), Secured Party 2 perfects a security interest in the same CER by obtaining control of the CER. Secured Party 2 immediately has perfection by control and priority under the Amendments because the priority between the two secured parties was not “established” before the effective date.

    4. Opinions

    4.1. General

    As is evident from the discussion above, opinion preparers are likely to encounter “substantial practical limitations” on their making some of the factual and legal determinations needed to give an opinion on matters governed by the Amendments.

    4.2. Establishing Facts and Use of Assumptions

    Which UCC rules apply to the transaction will depend on whether the collateral is a CER, a controllable account, a controllable payment intangible, electronic money, or chattel paper (where an electronic record evidences the chattel paper). Thus, to determine which rules apply, the opinion preparers will have to decide whether a potential CER, electronic money, or chattel paper is “controllable” on the system where the collateral is recorded. In addition, the opinion preparers may have to determine whether the buyer or secured party has “control” of that asset, a fact that will depend on whether the required steps have been taken to obtain control under the terms of the applicable CER, the system on which the CER is recorded, or the law of the District of Columbia.

    To address the determinations similar to these under the UCC prior to the Amendments, when an opinion covered assets such as deposit accounts, securities accounts, securities, and instruments, opinion preparers have often based the opinion on factual and legal assumptions (usually stated) regarding many of the elements of the opinion. These assumptions (factual and legal) include:

    • Applicable law,
    • The transferor’s ownership of an interest in the asset being sold or in which a security interest otherwise has been created,
    • Characterization of the asset,
    • A transferee’s absence of notice or knowledge of claims to or rights with respect to the asset or collateral,
    • The transferee’s good faith,
    • Status of certain third parties,
    • The giving of value, and
    • Particular steps have been taken to effect the transaction.

    A comparable approach is appropriate when an opinion covers assets with many characteristics of negotiability and comparable legal structures for perfection, such as with the kinds of assets discussed in this report.

    The facts opinion preparers need to establish when giving opinions on CERs, controllable accounts, controllable payment intangibles, electronic money, and chattel paper when the chattel paper is evidenced by an electronic record are discussed below. As indicated below, depending on the circumstances, some of the facts can be established by express assumptions, some by unstated assumptions, and some by an easily performed factual investigation. Given the novelty of many of the terms and concepts used in the Amendments, opinion preparers are likely to state most assumptions expressly, leaving unstated the assumptions customarily used in secured transactions with traditional collateral.

    If an opinion is not based on assumptions as to characterization, control, and related matters, opinion preparers will need to do additional work before they can give the opinion. Although descriptions of the operation of a system are often provided in summaries provided by the system where the asset is recorded, opinion preparers may have difficulty obtaining assurance that any particular description of a system is “the” correct system description. If they do not expressly assume the necessary facts, opinion preparers giving an opinion on CERs, controllable accounts, controllable payment intangibles, electronic money, and chattel paper where an electronic record evidences chattel paper may rely (usually expressly) on any descriptions and other factual summaries provided to them by appropriate sources or on the web page of the relevant system. Opinion preparers giving an opinion on these assets are not required to determine whether the system descriptions and other factual summaries are accurate.

    4.3. Choice of Law

    As explained above and in this section below, choice-of-law issues concerning control of a CER are particularly difficult, especially while the Amendments are not in effect in all U.S. jurisdictions. As a result and given the likelihood (discussed above and below) that the CER’s jurisdiction will frequently be the District of Columbia, the illustrative opinion language in the tables in section 4.4 and the illustrative opinions in Appendices A and B include important assumptions regarding the CER’s jurisdiction and the forum where litigation might occur.

    Opinions on security interests in personal property under UCC Article 9 typically do not address or address only in a limited way choice-of-law or choice-of-forum issues. Opinion preparers customarily address these matters with only when giving an opinion on control of a deposit account, control of a securities account, or control of a security entitlement. When an opinion does address choice-of-law or choice-of-forum matters they customarily address them with an express assumption. Thus, the opinion ordinarily will be based on an express assumption as to the depositary “bank’s jurisdiction” or the “securities intermediary’s jurisdiction.”

    Pre-Amendments Articles 8 and 9 are uniform in all relevant respects in each U.S. jurisdiction. Thus, every U.S. jurisdiction has the same choice-of-law rule and applies the same law under that rule. As a result, the forum where litigation might be brought does not matter in opinions on perfecting a security interest by control in a deposit account or a security account. Consequently, assumptions regarding these matters are not controversial because every U.S. jurisdiction has the same choice-of-law rules for these types of assets.

    However, uniformity does not exist when the collateral is a CER, controllable account, or controllable payment intangible. In those circumstances opinion preparers have significantly more difficulty determining the CER’s jurisdiction. Consequently, subsection 12–107(c)(5) addresses an issue that does not normally arise under Sections 8-110 and 9-305.

    As explained in detail in the PEB Report, while the Amendments are in effect in some, but not all, U.S. jurisdictions, the analysis is even more complex.

    The perfection by control of a security interest in a CER, controllable account, and controllable payment intangible can be effected only if one of the two following scenarios applies with respect to the forum:

    • (1) The Amendments are in effect in the forum and are in effect in the CER’s jurisdiction, or
    • (2) The Amendments are not in effect in the forum and the Amendments are in effect in the debtor’s Article 9 “location.”

    However, perfection by control of a security interest in a CER, controllable account, and controllable payment intangible based on control of a CER cannot be effected if either of the two following scenarios applies:

    • (3) The Amendments are in effect in the forum and are not in effect in the CER’s jurisdiction, or
    • (4) The Amendments are not in effect in the forum and the Amendments are not in effect in the debtor’s Article 9 “location.”

    This analysis is summarized in the following table:

      Amendments in effect in CER’s jurisdiction
    		 Amendments not in effect in CER’s jurisdiction
    		 Amendments in effect in debtor’s location Amendments not in effect in debtor’s location
    Amendments in effect in forum
    		Control available [scenario 1] Control not available [scenario 3]

    		 N/A N/A
    Amendments not in effect in forum N/A N/A
    		 Control available [scenario 2]

    		 Control not available [scenario 4]

    As stated in the Amendments:

    Many controllable electronic records, attached or logically associated records, and systems in which controllable electronic records are recorded that exist at the time of the 2022 Amendments do not identify the “controllable electronic record’s jurisdiction” or the governing law (some permissioned systems being exceptions).

    The difficulty of determining the CER’s jurisdiction and the effectiveness of the Amendments in only some jurisdictions make it extremely difficult for an opinion giver to determine the CER’s jurisdiction. This difficulty combined with the likelihood of the District of Columbia’s being the CER’s jurisdiction in most circumstances make it appropriate for opinion givers to assume expressly that the CER’s jurisdiction is the District of Columbia.

    That assumption eliminates any need for an opinion giver to determine the CER’s jurisdiction. By expressly assuming the CER’s jurisdiction to be the District of Columbia, opinion givers will always be treating the Amendments as being in effect. This leaves only the need to determine if the Amendments are in effect in the debtor’s location.

    The results of application of this process will affect the opinion letter as follows:

    • (i) If (a) the CER's jurisdiction is assumed or known to be the District of Columbia (or another jurisdiction in which the Amendments are in effect) and (b) the Amendments are in effect in the debtor’s location, then the opinion giver does not need to make an assumption concerning the forum in which any litigation is brought because perfection by control will be available no matter where the litigation takes place and regardless of whether the Amendments are in effect or not in the forum.
    • (ii) If (a) the CER's jurisdiction is assumed or known to be the District of Columbia (or another jurisdiction where the Amendments are in effect) and (b) the Amendments are not in effect in the debtor’s location, then the opinion giver can give the control opinion only if the Amendments are in effect in the forum. That possibility is addressed in a proviso in the illustrative opinion.

    This analysis of when the control opinion can be given is summarized in the following table based on the illustrative assumption:

    Amendments in effect in debtor’s location? Amendments in effect in CER’s jurisdiction?185 Assumption or proviso concerning forum?
    Yes Yes

    		 None needed as it does not matter if the Amendments are in effect in the forum
    No Yes Include proviso to control opinion that litigation will occur in a forum where Amendments are in effect

    Because many debtors are “located” in Delaware, that fact, when combined with the assumption that the CER’s jurisdiction is the District of Columbia, generally permits giving the opinion in most transactions.

    A similar analysis would apply when giving an opinion on perfection by control of a security interest in chattel paper where an electronic record evidences the chattel paper. For electronic money, the only question will be whether the Amendments are in effect in the debtor’s location.

    This analysis leads to the following illustrative approach to giving an opinion on control:

    • 1. The opinion is based on the express assumption that the CER’s jurisdiction is the District of Columbia.
    • 2. The opinion giver reviews the Uniform Commercial Code of the debtor’s location to see if the Amendments are in effect there.
    • 3. Based on that review, the opinion giver then words the control opinion as follows:
      • If the Amendments are in effect in the debtor’s location (e.g., Delaware), the opinion giver can give the control opinion without any reference to the forum because the status of the Amendments in the forum does not matter (in combination with the assumption as to the CER’s jurisdiction being the District of Columbia).
      • If the Amendments are not in effect in the debtor’s location, the control opinion would assume expressly that the litigation is in a forum where the Amendments are in effect.

    4.4. Tables with Illustrative Opinion Language

    The following tables identify matters (factual and legal) that the opinion preparers should evaluate or assume to give opinions on CERs, controllable accounts, controllable payment intangibles, electronic money, and electronic copies of a record evidencing chattel paper, as well as relevant opinion language, explanations, and comments. Each table for an opinion on a type of asset builds on the preceding tables for the analysis applicable to that type of asset (including the relevant opinion assumptions and conclusions).

    The language of the opinions track the relevant statutory text, especially for any limited “take free” and “priority” opinions. The “take free” and “priority” rules apply only to certain rights of certain third parties as provided in the UCC, and the wording of the opinion should strictly follow the words of the UCC.

    The information relevant to a particular opinion may be highly technical and not within the competence of a lawyer to evaluate. It will often be assumed as indicated in the tables below.

    Opinion preparers should replace the bracketed terms in the tables below with defined terms appropriate for the transaction. The term “purchaser” in the illustrative language refers to a buyer of a CER, controllable account, controllable payment intangible, or chattel paper evidenced by electronic copies of a record and a secured party (which includes a buyer of a right to payment), as appropriate. “Purchaser” is not used in the illustrative tables related to “money” because Article 9 and Article 12 apply only indirectly to buyers of money.

    Illustrative forms of compiled opinions using the language in these tables are provided in Appendices A–D.

    (i) CERs (Tables 1–3)—See Appendix A

    Opinion on attachment of a security interest in a CER [Table 1]

    Topic Illustrative Language Comment
    Applicable law [Covered law provision.] For purposes of creation of a security interest in a CER, the UCC’s general choice-of-law rules, not those of the CER’s jurisdiction, determine which state’s law applies; thus the “covered law” statement in the opinion letter addresses this matter; see § 3.3(i).
    Assumption: transferor’s ownership of the CER [Borrower] has rights in the [CER] or the power to transfer rights in the [CER]. This is an unstated assumption; opinion preparers often state the assumption expressly; see § 4.2.
    Assumption: characterization of the CER The [CER] is a “controllable electronic record” as defined in UCC § 12‑102(a)(1). This assumption typically is stated expressly; if the opinion preparers are aware that an asset that would otherwise be a CER comes within one of the exclusions from the definition, the opinion preparers should consider (i) whether reliance on that assumption is appropriate and (ii) identifying the exclusion in the opinion letter. See § 3.2(ii).
    Assumption (sometimes): purchaser has given value [Secured Party] has given “value” as defined in UCC § 1‑204. This is a fact that applies to all opinions on the creation or attachment of a security interest. This fact will typically be observed by the opinion preparers as part of the transaction and opinion preparers often do not assume it or make an unstated assumption; other opinion preparers assume it expressly; see § 3.3(i). Note the different meaning of “value” when used for a qualifying purchaser opinion. See § 3.2(iv).
    Opinion: attachment The Security Agreement is effective to create a security
    interest in the [CER].    		 Drawn from TriBar Article 9 Report, Appendix A.

    Opinion on perfection of security interest in a CER by control [Table 2]

    Topic Illustrative Language Comment
    General   This opinion builds on the preceding attachment opinion; see § 3.3(ii).
    Assumption: applicable law The CER’s jurisdiction for purposes of Uniform Commercial Code Article 9 with respect to the [CER] is the District of Columbia. This assumption should be stated expressly; see §§ 3.2(v) and 4.2. See note 183 and accompanying text.
    Assumption: first element of control—benefits [Secured Party] has the power to avail itself of substantially all of the benefits of the CER. This assumption will typically be stated expressly; see § 3.2(iii).
    Assumption: second element of control—exclusion of others [Secured Party] has the exclusive power to prevent others from enjoying substantially all of the benefits of the [CER]. This assumption will typically be stated expressly; see § 3.2(iii). If an assumption on “sharing” as described below is included, this assumption should begin with: “Except as assumed below, in assumption [ ].”
    Assumption: third element of control—transfer [Secured Party] has the exclusive power to transfer control of the [CER] to another person or to cause another person to obtain control of the [CER] as a result of the transfer of the electronic record. This assumption will typically be stated expressly; see § 3.2(iii). If an assumption on “sharing” as described below is included, this assumption should begin with: “Except as assumed below, in assumption [ ].”
    Assumption: any powers of others are “shared” Any powers held by a person other than [Secured Party] are “shared” as that term is used in UCC § 12‑105. This assumption is subsumed in the second and third elements of control referred to above. Nevertheless, when more than one person has one of these powers, this assumption may be appropriate. The opinion preparers should review any documents of which it is aware to determine if any create rights that are not “shared” within the meaning of § 12‑105(c); if the opinion preparers are aware that more than one person has any of the described powers concerning the CER and the arrangement does not fit within the definition of “share,” the opinion preparers should consider whether to rely on this assumption or whether to qualify the opinion. See § 3.2(iii). See comments above to assumptions on second and third elements of control.
    Assumption: fourth element of control—identify person in control [Secured Party] has the power readily to identify itself as having the powers described in assumptions[ ]–[ ]. This assumption will typically be stated expressly; see § 3.2(iii).
    Assumption: control through another person [Third person] has control of the CER and has acknowledged that it has control on behalf of [Secured Party]. If the opinion preparers are aware that the purchaser has control through another person (who has control), the opinion preparers should confirm (if applicable) that the other person has acknowledged that it has control “on behalf of” the secured party and that the other person is not the transferor; there may be an acknowledgment document that the opinion preparers can review in place of the assumption; see § 3.2(iii). In addition, the opinion preparers should assume or confirm that the other person is not the transferor (the seller or the debtor).
    Opinion: Control [Secured Party] has control of the [CER]. See § 3.2(iii). If the Amendments are not in effect in the debtor’s location, precede this opinion with: “If any litigation or similar proceeding concerning the perfection, effect of perfection or nonperfection, and the priority of a security interest in the CER takes place in a forum where the 2022 Uniform Commercial Code amendments are in effect, . . .” This opinion and the opinion in the following row of this table are often combined.
    Opinion: Perfection The security interest in the [CER] is perfected by control. This opinion and the opinion in the preceding row of this table are often combined. If the Amendments are not in effect in the debtor’s location, precede this opinion with: “If any litigation or similar proceeding concerning the perfection, effect of perfection or nonperfection, and the priority of a security interest in the CER takes place in a forum where the 2022 Uniform Commercial Code amendments are in effect, …”

    Opinion that secured party “takes free” of a property right in a CER [Table 3]

    Topic Illustrative Language Comment
    General   This opinion builds on the preceding attachment and control opinions; see § 3.2(iv).
    Assumption (sometimes): Secured party has given “value” [Secured Party] has given “value” as defined in UCC § 12‑102(a)(4). This fact will typically be observed by the opinion preparers as part of the transaction and opinion preparers often do not assume it or make an unstated assumption; other opinion preparers assume it expressly; see § 4.2. Note that the definition of “value” for qualifying purchaser status uses the definition in UCC § 3‑303(a) and is different from the definition of “value” for attachment; see § 3.2(iv).
    Assumption: purchaser has acted in good faith [Secured Party] has acted in good faith in acquiring its security interest. This is an unstated assumption in all opinions; see § 4.2; some opinion preparers state this assumption expressly.
    Assumption: purchaser does not have notice of a claim of a property right in the CER [Secured Party] does not have notice of a claim of a property right in the [CER]. This is an unstated assumption as the opinion preparers have no way to know that the secured party does not have notice of a claim of a property right; some opinion preparers state this assumption expressly; this assumption is worded to correspond to UCC § 12‑102(a)(2), which applies to CERs, controllable accounts, and controllable payment intangibles; see § 3.2(iv).
    Opinion: qualifying purchaser [Secured Party] is a qualifying purchaser of the [CER] as defined in UCC § 12‑102(a)(2). Drawn from opinion on purchaser of securities, as stated in TriBar Article 9 Report; the wording of this opinion is based on UCC § 9‑326A and UCC § 12‑104(e); see § 3.2(iv).
    Opinion: purchaser “takes free” [Secured Party] has acquired its rights in the [CER] free of a claim of a property right in the [CER]. See § 3.2(iv). Some opinion preparers combine this opinion with the opinion in the preceding row.

    (ii) Controllable accounts and controllable payment intangibles (Tables 4–6)—See Appendix B

    Opinion on attachment of a security interest in a controllable account or a controllable payment intangible [Table 4]

    Topic Illustrative Language Comment
    Assumption: applicable law [Covered law provision.] For purposes of creation of a security interest in a controllable account or controllable payment intangible, the UCC’s general choice‑of‑law rules, not those of the CER’s jurisdiction, determine which state’s law applies to the creation of the security interest. See § 3.2(v).
    Assumption: transferor’s ownership of the controllable account or controllable payment intangible [Borrower] has rights in the [controllable account] [controllable payment intangible] or the power to transfer rights in the [controllable account] [controllable payment intangible]. This is an unstated assumption; opinion preparers often state the assumption expressly; see § 4.1.
    Assumption: the controllable account or controllable payment intangible is evidenced by the CER The [controllable account] [controllable payment intangible] is evidenced by the [CER]. This assumption will typically be stated expressly; this assumption may already be covered in the attachment opinion; see § 3.2(ii).
    Assumption: characterization of the controllable account and controllable payment intangible The [controllable account] [controllable payment intangible] is a [“controllable account”] [“controllable payment intangible”] as defined in UCC § 9‑102(a)[(27A)] [and] [(27B)]. This assumption typically is stated expressly; see § 4.2. The account or payment intangible must be (i) a “monetary” obligation, (ii) evidenced by a CER, and (iii) provide that the obligor agrees to pay the person in control of the CER that evidences that obligation. See § 3.2(ii).
    Assumption: purchaser has given value [Secured Party] has given “value” as defined in UCC § 1‑204. This fact will typically be observed by the opinion preparers as part of the transaction; and opinion preparers often do not assume it or make an unstated assumption; other opinion preparers often assume it expressly; see § 4.2. Note that the meaning of “value” for purposes of attachment is different than the meaning of “value” under the qualifying purchaser rules. See § 3.2(iv).
    Opinion: attachment The Security Agreement is effective to create a security interest in the [controllable account] [controllable payment intangible]. Drawn from TriBar Article 9 Report, Appendix A.

    Opinion on perfection of a security interest in a controllable account or a controllable payment intangible by control of the CER that evidences the controllable account or controllable payment intangible [Table 5]

    Topic Illustrative Language Comment
    General   This opinion builds on the preceding attachment opinion.
    Assumption: applicable law The CER’s jurisdiction for the [CER] for purposes of Uniform Commercial Code Article 9 is the District of Columbia. This assumption will typically be stated expressly; see §§ 3.2(v), 3.3(iv), and 4.3. See note 183.
    Opinion: control [Secured Party] has control of the [controllable account] [controllable payment intangible]. This opinion is based on the earlier opinion that the secured party has control of the CER that evidences the controllable account or controllable payment intangible. Note that the purchaser does not have to have a property interest in the CER to have control of the CER and thus control of the controllable account or controllable payment intangible. See § 3.3(ii). If the Amendments are not in effect in the debtor’s location, precede this opinion with: “If any litigation or similar proceeding concerning the perfection, effect of perfection or nonperfection, and the priority of a security interest in the CER takes place in a forum where the 2022 Uniform Commercial Code amendments are in effect; …”
    Opinion: perfection The security interest in the [controllable account] [controllable payment intangible] is perfected by control. Some opinion preparers combine this opinion with the preceding opinion.

    Opinion that secured party “takes free” of a property right in a controllable account or controllable payment intangible [Table 6]

    Topic Illustrative Language Comment
    General   This opinion builds on the preceding attachment and control opinions; see § 3.2(iv).
    Assumption: secured party has given “value” [Secured Party] has given “value” as defined in UCC § 12‑102(a)(4). This fact will typically be observed by the opinion preparers as part of the transaction and opinion preparers often do not assume it or make an unstated assumption; other opinion preparers assume it expressly; see § 4.2. Note that the definition of “value” for qualifying purchaser status uses the definition in UCC § 3‑303(a) and is different from the definition of value for attachment; see § 3.2(iv).
    Assumption: purchaser has acted in good faith [Secured Party] has acted in good faith in acquiring its [security interest] [rights]. This is an unstated assumption in all opinions; see § 4.2. Some opinion preparers state this assumption expressly.
    Assumption: no notice of a claim of a property right [Secured Party] does not have notice of a claim of a property right in the [controllable account/controllable payment intangible]. This is an unstated assumption as the opinion preparers have no way to know that the secured party does not have notice of a claim of a property right; some opinion preparers state this assumption expressly; this assumption is worded to correspond to UCC § 12‑102(a)(2); see § 3.2(iv).
    Opinion: qualifying purchaser [Secured Party] is a qualifying purchaser of the [controllable account] [controllable payment intangible] as defined in UCC § 12‑102(a)(2). This is drawn from the opinion on purchaser of securities, as stated in TriBar Article 9 Report; note that the purchaser does not have to have a property interest in the CER to be a qualifying purchaser of the controllable account or controllable payment intangible evidenced by the CER; thus this opinion is not dependent on the purchaser being a qualifying purchaser of the CER itself; the wording of this opinion is based on UCC § 9‑326A and UCC § 12‑104(e); see § 3.2(v).
    Opinion: Purchaser “takes free” [Secured Party] has acquired its [security interest] [rights] in the [controllable account] [controllable payment intangible] free of a claim of a property right in the [controllable account] [controllable payment intangible]. Some opinion preparers combine this opinion with the opinion in the preceding row.

    (iii) Electronic money (Tables 7–9)—See Appendix C

    Opinion on attachment of a security interest in electronic money [Table 7]

    Topic Illustrative Language Comment
    General   Article 12 does not apply to electronic money. See § 3.2(i). Article 9 does not apply to sales of electronic money. Thus, the amendments apply only to a security interest in electronic money to secure an obligation. See § 3.2(ii).
    Assumption: applicable law [Covered law provision.] For purposes of creation of a security interest in electronic money, the UCC’s general choice‑of‑law rules apply to the creation of the security interest. See § 3.3(iv).
    Assumption: transferor’s ownership of the electronic money [Borrower] has rights in the [electronic money] or power to transfer rights in the electronic money. This is an unstated assumption; opinion preparers often state the assumption expressly; see TriBar Article 9 Report, Appendix A.
    Assumption: characterization of the electronic money The [electronic money] is “electronic money” as defined in UCC § 9‑102(a)(31A). This assumption typically is stated expressly; if “money” is in the form of a deposit account, the opinion preparers should consider whether reliance on that assumption is appropriate. See § 4.2.
    Assumption: secured party has given value [Secured Party] has given “value” as defined in UCC § 1‑204. This fact will typically be observed by the opinion preparers as part of the transaction; opinion preparers often assume it expressly; see TriBar Article 9 Report, Appendix A.
    Opinion: attachment The Security Agreement is effective to create a security interest in the electronic money. Drawn from TriBar Article 9 Report, Appendix A.

    Opinion on perfection of security interest in electronic money by control [Table 8]

    Topic Illustrative Language Comment
    General   This opinion builds on the preceding attachment opinion.
    Assumption: applicable law
    		 [Borrower] is located for purposes of Uniform Commercial Code Article 9 in [name of state]. This assumption will typically be stated expressly; because the UCC has no special choice-of-law rule for perfection of a security interest in electronic money, perfection and priority of a security interest in money is governed by the general Article 9 choice-of-law rules for perfection of a security interest; see § 3.4(v). Note that no assumption concerning the forum for litigation is necessary for electronic money. See § 4.3. 
    Assumption: first element of control—benefits  [Secured Party] has the power to avail itself of substantially all of the benefits of the [electronic money]. This assumption will typically be stated expressly; see § 3.2(iii).
    Assumption: second element of control—exclusion of others [Secured Party] has the exclusive power to prevent others from enjoying substantially all of the benefits of the [electronic money], subject to [ ] below. This assumption will typically be stated expressly; see § 3.2(iii). If an assumption on “sharing” as described below is included, this assumption  should begin with: “Except as assumed below in assumption [ ].
    Assumption: third element of control—transfer [Secured Party] has the exclusive power to transfer control of the [electronic money] to another person to obtain control of the [electronic money] as a result of the transfer of the electronic record. This assumption will typically be stated expressly; see § 4.2. If an  assumption on “sharing” as described below is included, this assumption should begin with: “Except as assumed below in assumption [ ].
    Assumption: second and third elements of control—any powers of others are “shared” Any powers held by a person other than [Secured Party] are “shared” as that term is used in UCC § 12‑105. The opinion preparers should review any documents of which they are aware to determine if any create rights that are not “shared” within the meaning of § 12-105(c); if the opinion preparers are aware that more than one person has control of the asset and the arrangement does not fit within the definition of “share,” the opinion preparers should consider whether to rely on this assumption or whether to qualify the opinion. See § 3.2 (iii). See comments above to assumptions on second and third elements of control.
    Assumption: fourth element of control—identify person in control [Secured Party] has the power readily to identify itself as having the powers listed in assumptions [ ]–[ ]. This assumption will typically be stated expressly; see § 4.2
    Assumption: control through another person [Third person] has control of the [electronic money] and has acknowledged that it has control on behalf of  [Secured Party]. If the opinion preparers are aware that the purchaser has control through another person, the opinion preparers should confirm that the other person has acknowledged that it has control “on behalf of ” the secured party and that the other person is not the transferor (the debtor). See § 3.2(iii).
    Opinion: control [Secured Party] has control of the [electronic money]. See § 3.2(iii).
    Opinion: perfection The security interest in the [electronic money] is perfected by control. Some opinion preparers combine this opinion with the opinion in the preceding row.

    Opinion that secured party “takes free” of a competing security interest in electronic money [Table 9]

    Topic Illustrative Language Comment
    General   This opinion builds on the preceding attachment and control opinions and is based on UCC § 9‑332.
    Assumption: secured party has not acted in collusion with debtor [Secured Party] has not acted in collusion with the debtor in violating the rights of another “secured party.” This assumption is usually stated expressly; see § 4.2. The “take free” rule for money is not subject to a good faith or absence of notice requirement. See § 3.4(iv).
    Opinion: secured party takes free of competing security interest [Secured Party] has taken its security interest free of any other security interest in the [electronic money]. This opinion is more limited than the “qualifying purchaser” opinion for a CER, controllable account, and controllable payment intangible, which applies to all property claims in the relevant asset. See § 3.4(iv).

    (iv) Chattel paper where there is an electronic record evidencing the chattel paper (Tables 10–12)—See Appendix D

    Opinion on attachment of a security interest in chattel paper where there is an electronic copy of a record evidencing the chattel paper [Table 10]

    Topic Illustrative language Comment
    Assumption: applicable law [Covered law provision.]  For purposes of creation of a security interest in chattel paper where there is an electronic record evidencing the chattel paper, the UCC’s general choice‑of‑law rules, not those of the chattel paper’s jurisdiction, determine which state’s law applies to the creation of the security interest. See § 3.5(v).
    Assumption: transferor’s ownership of the chattel paper [Borrower] has rights in the chattel paper or the power to transfer rights in the chattel paper. This is an unstated assumption; opinion preparers often state the assumption expressly; see § 4.2.
    Assumption: characterization of the chattel paper The [chattel paper] is “chattel paper” as defined in UCC § 9‑102(a)(11). This assumption typically is stated expressly; see § 4.2. The chattel paper must be a “monetary obligation.” This assumption incorporates that element of the definition. See § 3.4(i). For the attachment opinion, the record evidencing the chattel paper does not have to be electronic.
    Assumption: purchaser has given value [Secured Party] has given “value” as defined in UCC § 1‑204. This fact will typically be observed by the opinion preparers as part of the transaction; opinion preparers often assume it expressly; see § 4.2.
    Opinion: attachment The Security Agreement is effective to create a security interest in the chattel paper. Drawn from TriBar Article 9 Report, Appendix A.

    Opinion on perfection by control of a security interest in chattel paper where there is an electronic record evidencing the chattel paper [Table 11]

    Topic Illustrative language Comment
    General   This opinion builds on the preceding attachment opinion.
    Assumption: applicable law The chattel paper’s jurisdiction for purposes of Uniform Commercial Code Article 9 is [name of jurisdiction]. This assumption will typically be stated expressly; see § 4.2.
    Assumption: characterization of the chattel paper where there is an electronic copy of a record evidencing the chattel paper The electronic copy of a record evidencing the chattel paper is an “electronic copy of a record evidencing chattel paper” as defined in UCC § 9‑102(a)(11). This assumption typically is stated expressly; see § 3.5(ii).
    Assumption: first element of control—benefits [Secured Party] has the power to avail itself of substantially all of the benefits of the [chattel paper]. This assumption will typically be stated expressly; see § 3.5(ii).
    Assumption: second element of control—exclusion of others [Secured Party] has the exclusive power to prevent others from enjoying substantially all of the benefits of the [chattel paper]. This assumption will typically be stated expressly; see § 3.5(ii). If an assumption on “sharing” as described below is included, this assumption should begin with “Except as assumed below in assumption [ ].”
    Assumption: third element of control—transfer [Secured Party] has the exclusive power to transfer control of the [chattel paper] to another person. This assumption will typically be stated expressly; see § 3.5(ii). If an assumption on “sharing” as described below is included, this assumption should begin with “Except as assumed below in assumption [ ].”
    Assumption: second and third elements of control—any powers of others are “shared” Any powers held by a person other than [Secured Party] are “shared” as that term is used in UCC § 12‑105. This assumption is subsumed in the second and third elements of control referred to above. Nevertheless, when more than one person has one of these powers, this assumption may be appropriate. The opinion preparers should review any documents of which they are aware to determine if any create rights that are not “shared” within the meaning of U.C.C. § 12‑105(c); if the opinion preparers are aware that more than one person has control of the asset and the arrangement does not fit within the definition of “share,” the opinion preparers should consider whether to rely on this assumption or whether to qualify the opinion. See § 3.5(ii). See comments above to assumptions on second and third elements of control.
    Assumption: control through another person [Third person] has control of the [chattel paper] and has acknowledged that it has control on behalf of Secured Party. If the opinion preparers are aware that the purchaser has control through another person, it may be practical for the opinion preparers to confirm that the other person has acknowledged that it has control “on behalf of ” the secured party and that the other person is not the transferor. See § 3.5(iii).
    Assumption: fourth element of control—identify person in control [Secured Party] has the power readily to identify itself as having the powers listed in assumptions [ ]–[ ]. This assumption will typically be stated expressly; see § 3.5(ii).
    Assumption: authoritative copies Secured Party’s control of the [chattel paper] covers each authoritative electronic copy of a record evidencing the chattel paper. This assumption will typically be stated expressly; see § 3.5(ii).
    Assumption: authoritative tangible copies [There are no authoritative tangible copies of a record evidencing the chattel paper.] [Secured Party has possession of each authoritative tangible copy of a record evidencing the chattel paper.] Only one of these bracketed assumptions should be used. See § 3.5(ii).
    Opinion: control [Secured Party] has control of the electronic copy of the electronic record evidencing the chattel paper. See § 3.5(ii).
    Opinion: perfection The security interest in the electronic copies of the records evidencing the chattel paper is perfected by control. Some opinion preparers combine this opinion with preceding opinion.

    Opinion that secured party has priority over the security interest of another secured party in chattel paper where there is an electronic record evidencing the chattel paper [Table 12]

    Topic Illustrative language Comment
    General   This opinion builds on the preceding attachment and control opinion.
    Assumption: purchaser has given “value” [Secured Party] has given “value” as defined in UCC § 1‑204.  Note that for chattel paper (unlike for obtaining the status of a qualifying purchaser under Article 12) the definition of “value” for priority status is the same as the definition of value for attachment; see § 3.5(iv).
    Assumption: purchaser has acted in good faith [Secured Party] has acted in good faith in acquiring its security interest. This is an unstated assumption in all opinions; see § 4.2. Some opinion preparers state this assumption expressly.
    Assumption: no knowledge of violation [Secured Party] does not have knowledge that the purchase violates the rights of another secured party with a security interest in the chattel paper. See § 3.5(iv).  This is an unstated assumption as the opinion preparers have no way to know that the secured party does not have knowledge; some opinion preparers state this assumption expressly; this assumption is worded to correspond to UCC § 9‑330(b); see § 3.5(iv).
    Assumption: ordinary course [Secured Party] has obtained its rights in the chattel paper in the ordinary course of its business.  This assumption is usually taken expressly.
    Opinion: Purchaser “priority” [Secured Party] has acquired its security interest in the chattel paper with priority over another secured party with a security interest in the chattel paper where there is an electronic copy of a record evidencing the chattel paper.  See § 3.5(iv). Note that this opinion is narrower than the “take free” opinion for a qualifying purchaser of a CER, controllable account, or controllable payment intangible.

    5. Conclusion

    To give opinions on the types of assets covered by the Amendments, the opinion preparers will need to learn new terminology and substantive rules of the UCC and address those changes in their opinion letters. With careful study and drafting of appropriate language, including the requisite assumptions, qualifications, and opinion conclusions, lawyers will be able to give opinions on these new matters.

    Appendix A

    Illustrative opinion letter on controllable electronic record—See Tables 1–3

    Illustrative Security Interest Opinion

    Law Offices

    Wise, Safe & Solvent LLP

    One Thousand Wall Street

    New York, New York 10005

    [date]

    Careful Lending Bank

    Two Thousand Wall Street

    New York, New York 10005

    Ladies and Gentlemen:

    We have acted as counsel to Rock Solid Corporation (“Borrower”), a [ ] corporation, in connection with the preparation, execution, and delivery of, and borrowing under, the Credit Agreement, dated August 1, 20–, between you (‘‘Secured Party’’) and Borrower (the ‘‘Credit Agreement’’), the Security Agreement, dated August 1, 20–, between Secured Party and Borrower (the ‘‘Security Agreement’’), and the other documents identified below. This opinion letter is delivered to you pursuant to Section [ ] of the Credit Agreement.

    References in this opinion letter to the ‘‘[covered law jurisdiction] U.C.C.’’, the “[CER's jurisdiction] U.C.C.”, and the “[location of debtor jurisdiction] U.C.C.” are to the Uniform Commercial Code currently in effect in the [covered law jurisdiction], [CER's jurisdiction], and [location of debtor jurisdiction]. Capitalized terms used but not defined in this opinion letter have the meanings given to them in the Security Agreement. All terms in opinions [ ]–[ ] that are defined in the [covered law jurisdiction] U.C.C. and that are not capitalized have the meaning given to them in the [covered law jurisdiction] U.C.C.

    For purposes of this opinion letter, we have reviewed the following documents:

    • (a) [Insert in appropriate lettered items the documents reviewed for non‑security interest opinions, such as a certified copy of articles or certificate of incorporation];
    • (b) the Credit Agreement;
    • (c) the Security Agreement; and
    • (d) [other documents].

    For purposes of this opinion letter we have also reviewed such additional documents, and made such other investigation as we have deemed appropriate.

    [Assumptions]

    • 1. The CER’s jurisdiction for purposes of Uniform Commercial Code Article 9 with respect to the [CER] is the District of Columbia.
    • 2. [Secured Party] has the power to avail itself of substantially all of the benefits of the CER.
    • 3. [Secured Party] has the exclusive power to prevent others from enjoying substantially all of the benefits of the [CER].
    • 4. [Secured Party] has the exclusive power to transfer control of the [CER] to another person or to cause another person to obtain control of the [CER] as a result of the transfer of the electronic record.
    • 5. Any powers held by a person other than [Secured Party] are “shared” as that term is used in UCC § 12‑105.
    • 6. [Secured Party] has the power readily to identify itself as having the powers described in assumptions[ ]–[ ].
    • 7. [Third person] has control of the CER and has acknowledged that it has control on behalf of [Secured Party].

    Based on the foregoing and subject to the other paragraphs of this opinion letter, we express the following opinions:

    • 1. [Insert in appropriately numbered paragraphs for non‑security interest opinions].
    • 2. [Insert in appropriately numbered paragraphs for creation or attachment of security interest].
    • 3. [Insert in appropriately numbered paragraphs addressing perfection of the security interest by filing of a financing statement].
    • 4. [Secured Party] has control of the [CER].
    • 5. The security interest in the [CER] is perfected by control.

    The opinions expressed in this opinion letter are limited to the federal law of the United States and the law of the [covered law jurisdiction] [and] [location of debtor jurisdiction]. Our opinions in paragraphs 1–2 are limited to Article 9 of the [covered law jurisdiction] U.C.C. Our opinions in paragraphs 3–5 are limited to Article 9 of the (CER's jurisdiction) [location of debtor jurisdiction] U.C.C. This opinion letter is being delivered to you in connection with the above-described transaction and may not be relied on by you for any other purpose. This opinion letter may not be relied on or furnished to any other person without our prior written consent.

    Very truly yours,

    Appendix B

    Illustrative opinion letter on controllable account or controllable payment intangible—See Tables 4–6

    Illustrative Security Interest Opinion

    Law Offices

    Wise, Safe & Solvent LLP

    One Thousand Wall Street

    New York, New York 10005

    [date]

    Careful Lending Bank

    Two Thousand Wall Street

    New York, New York 10005

    Ladies and Gentlemen:

    We have acted as counsel to Rock Solid Corporation (“Borrower”), a [ ] corporation, in connection with the preparation, execution, and delivery of, and borrowing under, the Credit Agreement, dated August 1, 20–, between you (‘‘Secured Party’’) and Borrower (the ‘‘Credit Agreement’’), the Security Agreement, dated August 1, 20–, between Secured Party and Borrower (the ‘‘Security Agreement’’), and the other documents identified below. This opinion letter is delivered to you pursuant to Section [ ] of the Credit Agreement.

    References in this opinion letter to the ‘‘[covered law jurisdiction] U.C.C.’’, the “[CER's jurisdiction] U.C.C.”, and the “[location of debtor jurisdiction] U.C.C.” are to the Uniform Commercial Code currently in effect in the States of [covered law state], [CER's jurisdiction], and [location of debtor jurisdiction]. Capitalized terms used but not defined in this opinion letter have the meanings given to them in the Security Agreement. All terms in opinions [ ]–[ ] that are defined in the [covered law jurisdiction] U.C.C. and that are not capitalized have the meaning given to them in the [covered law jurisdiction] U.C.C.

    For purposes of this opinion letter, we have reviewed the following documents:

    • (a) [Insert in appropriate lettered items the documents reviewed for non‑security interest opinions, such as a certified copy of articles or certificate of incorporation];
    • (b) the Credit Agreement;
    • (c) the Security Agreement; and
    • (d) [other documents].

    For purposes of this opinion letter, we have also reviewed such additional documents, and made such other investigation as we have deemed appropriate.

    [Assumptions]

    • 1. The [controllable account] [controllable payment intangible] is evidenced by the [CER].
    • 2. The [controllable account] [controllable payment intangible] is a [“controllable account”] [“controllable payment intangible”] as defined in UCC § 9‑102(a)(27A) and (27B).
    • 3. The CER’s jurisdiction for the [CER] for purposes of Uniform Commercial Code Article 9 is the District of Columbia.
    • 4. Any litigation or similar proceeding concerning the perfection, effect of perfection or nonperfection, and the priority of a security interest in a [controllable account] [controllable payment intangible] will take place in a forum where the 2022 Uniform Commercial Code amendments are in effect.

    Based on the foregoing and subject to the other paragraphs of this opinion letter, we express the following opinions:

    • 1. [Insert in appropriately numbered paragraphs for non‑security interest opinions].
    • 2. [Insert in appropriately numbered paragraphs for creation or attachment of security interest].
    • 3. [Insert in appropriately numbered paragraphs addressing perfection of the security interest by filing of a financing statement].
    • 4. [Secured Party] has control of the [controllable account] [controllable payment intangible].
    • 5. The security interest in the [controllable] [controllable payment intangible] is perfected by control.

    The opinions expressed in this opinion letter are limited to the federal law of the United States and the law of [covered law jurisdiction] [and] [location of debtor jurisdiction]. Our opinions in paragraphs 1–2 are limited to Article 9 of the [covered law jurisdiction] U.C.C. Our opinions in paragraphs 3–5 are limited to Article 9 of the [CER's jurisdiction] [location of debtor jurisdiction] U.C.C. This opinion letter is being delivered to you in connection with the above-described transaction and may not be relied on by you for any other purpose. This opinion letter may not be relied on or furnished to any other person without our prior written consent.

    Very truly yours,

    Appendix C

    Illustrative opinion letter on electronic money—See Tables 7–9

    Illustrative Security Interest Opinion

    Law Offices

    Wise, Safe & Solvent LLP

    One Thousand Wall Street

    New York, New York 10005

    [date]

    Careful Lending Bank

    Two Thousand Wall Street

    New York, New York 10005

    Ladies and Gentlemen:

    We have acted as counsel to Rock Solid Corporation (“Borrower”), a [ ] corporation, in connection with the preparation, execution, and delivery of, and borrowing under, the Credit Agreement, dated August 1, 20–, between you (‘‘Secured Party’’) and Borrower (the ‘‘Credit Agreement’’), the Security Agreement, dated August 1, 20–, between Secured Party and Borrower (the ‘‘Security Agreement’’), and the other documents identified below. This opinion letter is delivered to you pursuant to Section [ ] of the Credit Agreement.

    References in this opinion letter to the ‘‘[covered law jurisdiction] U.C.C.’’ and the “[location of debtor jurisdiction] U.C.C.” are to the Uniform Commercial Code currently in effect in the States of [covered law jurisdiction] and [location of debtor jurisdiction]. Capitalized terms used but not defined in this opinion letter have the meanings given to them in the Security Agreement. All terms in opinions [ ]–[ ] that are defined in the [covered law jurisdiction] U.C.C. and that are not capitalized have the meaning given to them in the [covered law jurisdiction] U.C.C.

    For purposes of this opinion letter, we have reviewed the following documents:

    • (a) [Insert in appropriate lettered items the documents reviewed for non‑security interest opinions, such as a certified copy of articles or certificate of incorporation];
    • (b) the Credit Agreement;
    • (c) the Security Agreement; and
    • (d) [other documents].

    For purposes of this opinion letter we have also reviewed such additional documents, and made such other investigation as we have deemed appropriate.

    [Assumptions]

    • 1. The debtor is located for purposes of Uniform Commercial Code Article 9 in [name of state].
    • 2. [Secured Party] has the power to avail itself of substantially all of the benefits of the [electronic money].
    • 3. [Secured Party] has the exclusive power to prevent others from enjoying substantially all of the benefits of the [electronic money], subject to [5] below.
    • 4. [Secured Party] has the exclusive power to transfer control of the [electronic money] to another person to obtain control of the [electronic money] as a result of the transfer of the electronic record, subject to [5] below.
    • 5. Any powers held by a person other than [Secured Party] are “shared” as that term is used in UCC § 12‑105.
    • 6. [Third person] has control of the [electronic money] and has acknowledged that it has control on behalf of Secured Party.
    • 7. [Secured Party] has the power readily to identify itself as having the powers listed in assumptions [ ]–[ ].

    Based on the foregoing and subject to the other paragraphs of this opinion letter, we express the following opinions:

    • 1. [Insert in appropriately numbered paragraphs for non‑security interest opinions].
    • 2. [Insert in appropriately numbered paragraphs for creation or attachment of security interest].
    • 3. [Insert in appropriately numbered paragraphs addressing perfection of the security interest by filing of a financing statement].
    • 4. [Secured Party] has control of the [electronic money].
    • 5. The security interest in the [electronic money] is perfected by control.

    The opinions expressed in this opinion letter are limited to the federal law of the United States and the law of the [covered law jurisdiction] [and] [location of debtor jurisdiction]. Our opinions in paragraphs 1–2 are limited to Article 9 of the [covered law jurisdiction] U.C.C. Our opinions in paragraphs 3–5 are limited to Article 9 of the [location of debtor jurisdiction] U.C.C. This opinion letter is being delivered to you in connection with the above described transaction and may not be relied on by you for any other purpose. This opinion letter may not be relied on or furnished to any other person without our prior written consent.

    Very truly yours,

    Appendix D

    Illustrative opinion letter on chattel paper where there is an electronic copy of a record evidencing the chattel paper—See Tables 10–12

    Illustrative Security Interest Opinion

    Law Offices

    Wise, Safe & Solvent LLP

    One Thousand Wall Street

    New York, New York 10005

    [date]

    Careful Lending Bank

    Two Thousand Wall Street

    New York, New York 10005

    Ladies and Gentlemen:

    We have acted as counsel to Rock Solid Corporation (“Borrower”), a [ ] corporation, in connection with the preparation, execution, and delivery of, and borrowing under, the Credit Agreement, dated August 1, 20–, between you (‘‘Secured Party’’) and Borrower (the ‘‘Credit Agreement’’), the Security Agreement, dated August 1, 20–, between Secured Party and Borrower (the ‘‘Security Agreement’’), and the other documents identified below. This opinion letter is delivered to you pursuant to Section [ ] of the Credit Agreement.

    References in this opinion letter to the ‘‘[covered law jurisdiction] U.C.C.’’, the “[chattel paper's jurisdiction] U.C.C.” and the “[location of debtor jurisdiction] U.C.C.” are to the Uniform Commercial Code currently in effect in the States of [covered law jurisdiction], [chattel paper's jurisdiction] and [location of debtor jurisdiction]. Capitalized terms used but not defined in this opinion letter have the meanings given to them in the Security Agreement. All terms in opinions [ ]–[ ] that are defined in the [covered law jurisdiction] U.C.C. and that are not capitalized have the meaning given to them in the [covered law jurisdiction] U.C.C.

    For purposes of this opinion letter, we have reviewed the following documents:

    • (a)[Insert in appropriate lettered items the documents reviewed for non‑security interest opinions, such as a certified copy of articles or certificate of incorporation];
    • (b)the Credit Agreement;
    • (c)the Security Agreement; and
    • (d) [other documents].

    For purposes of this opinion letter we have also reviewed such additional documents, and made such other investigation as we have deemed appropriate.

    [Assumptions]

    • 1. The chattel paper’s jurisdiction for purposes of Uniform Commercial Code Article 9 is [name of jurisdiction].
    • 2. Any litigation or similar proceeding concerning the perfection or priority of a security interest in chattel paper perfected by control will take place in a forum where the 2022 Uniform Commercial Code amendments are in effect.
    • 3. The electronic copy of a record evidencing the chattel paper is an “electronic copy of a record evidencing chattel paper” as defined in UCC § 9‑102(a)(11).
    • 4. [Secured Party] has the power to avail itself of substantially all of the benefits of the [chattel paper].
    • 5. [Secured Party] has the exclusive power to prevent others from enjoying substantially all of the benefits of the [chattel paper].
    • 6. [Secured Party] has the exclusive power to transfer control of the [chattel paper] to another person.
    • 7. Any powers held by a person other than [Secured Party] are “shared” as that term is used in UCC § 12‑105.
    • 8. [Third person] has control of the [chattel paper] and has acknowledged that it has control on behalf of Secured Party.
    • 9. [Secured Party] has the power readily to identify itself as having the powers listed in assumptions [ ]–[ ].
    • 10. [Secured Party] has the power readily to identify itself as having the powers listed in assumptions [ ]–[ ].
    • 11. [Secured Party’s] control of the [chattel paper] covers each authoritative electronic copy of the record evidencing the chattel paper.
    • 12. [There are no authoritative tangible copies of a record evidencing the chattel paper]. [Secured Party has possession of each authoritative tangible copy of a record evidencing the chattel paper].

    Based on the foregoing and subject to the other paragraphs of this opinion letter, we express the following opinions:

    • 1. [Insert in appropriately numbered paragraphs for non‑security interest opinions].
    • 2. [Insert in appropriately numbered paragraphs for creation or attachment of security interest].
    • 3. [Insert in appropriately numbered paragraphs addressing perfection of the security interest by filing of a financing statement].
    • 4. Secured Party has control of the chattel paper where there is an electronic record evidencing the chattel paper.
    • 5. The security interest in the chattel paper is perfected by control where there is an electronic record evidencing the chattel paper.

    The opinions expressed in this opinion letter are limited to the federal law of the United States and the law of the [covered law jurisdiction] [and] [location of debtor jurisdiction]. Our opinions in paragraphs 1–2 are limited to Article 9 of the [covered law jurisdiction] U.C.C. Our opinions in paragraphs 3–6 are limited to Article 9 of the [covered law jurisdiction] [chattel paper's jurisdiction] U.C.C. This opinion letter is being delivered to you in connection with the above described transaction and may not be relied on by you for any other purpose. This opinion letter may not be relied on or furnished to any other person without our prior written consent.

    Very truly yours,

    Appendix E

    Members of the TriBar Opinion Committee

    New York

    Andrew Bettwy

    John M. Bibona

    J. Truman Bidwell, Jr.

    Bjorn Bjerke

    David A. Brittenham

    Robert Evans

    Gregory A. Fernicola

    A. N. Field

    Sylvia Fung Chin

    James Gadsden

    Sartaj Gill

    Eric Goodison

    Nicolas Grabar

    Richard R. Howe

    Peter J. Loughran

    Richard T. McDermott

    Prabhat K. Mehta

    Joel I. Papernik

    Noël Para

    Lesley Peng

    Andrew J. Pitts

    Robert S. Risoleo (Co‑Chair)

    Sandra M. Rocks**

    Lawrence Safran**

    Kenneth J. Steinberg

    Blair M. Tyson

    Frederick Utley

    Benjamin H. Weiner

    George M. Williams jr

    Andrew J. Yoon

    Massachusetts

    Donald W. Glazer (Co‑Chair)

    Stanley Keller

    Ettore Santucci

    James Smith

    California

    Richard N. Frasch

    Timothy G. Hoxie

    John B. Power

    Steven O. Weise*

    Delaware

    C. Stephen Bigler

    Louis G. Hering

    Christina Michelle Houston

    James G. Leyden, Jr.

    Norman M. Powell

    District of Columbia

    Arthur A. Cohen

    James J. Rosenhauer

    Craig D. Singer

    Robert A. Wittie

    **

    Georgia

    Jeffrey M. Smith

    Illinois

    Willis R. Buck, Jr.

    Andrew M. Kaufman

    Michigan

    Justin G. Klimko

    North Carolina

    A. Mark Adcock

    Texas

    Gail Merel**

    Stephen C. Tarry

    Washington

    Scott MacCormack

    ________________________

    * Reporter

    ** Member of Drafting Committee

    The TriBar Opinion Committee was formed over forty-five years ago by three New York bar associations. Over the years its membership has expanded to include lawyers from across the United States in leadership positions in city, state, and national bar groups focusing on third-party legal opinion practice. A list of the Committee members is attached as the Appendix. The views expressed in this Report reflect a consensus of Committee members but not necessarily the views of individual members or the law firms, bar associations, or other organizations with which they are associated.