- Alaska Statutes.
- Title 45. Trade and Commerce
- Chapter 29. Secured Transactions
- Section 615. Application of Proceeds of Disposition; Liability For Deficiency and Right to Surplus.
previous: Section 614
. Notification Before Disposition of Collateral in Consumer Goods Transaction.
next: Section 616
. Explanation of Calculation of Surplus or Deficiency.
AS 45.29.615. Application of Proceeds of Disposition; Liability For Deficiency and Right to Surplus.
- (a) A secured party shall apply or pay over for application the cash proceeds of disposition under AS 45.29.610
in the following order:
- (1) the reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing and, to the extent
provided for by agreement and not prohibited by law, reasonable attorney fees and legal expenses incurred by the
- (2) the satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is
- (3) the satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the
- (A) the secured party receives from the holder of the subordinate security interest or other lien an authenticated demand
for proceeds before distribution of the proceeds is completed; and
- (B) in a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is
senior to the interest of the consignor; and
- (4) a secured party that is a consignor of the collateral if the secured party receives from the consignor an
authenticated demand for proceeds before distribution of the proceeds is completed.
- (b) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable
proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply
with the holder's demand under (a)(3) of this section.
- (c) A secured party need not apply or pay over for application noncash proceeds of disposition under AS 45.29.610
unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for
application noncash proceeds shall do so in a commercially reasonable manner.
- (d) If the security interest under which a disposition is made secures payment or performance of an obligation, after
making the payments and applications required by (a) of this section and permitted by (c) of this section,
- (1) unless (a)(4) of this section requires the secured party to apply or pay over cash proceeds to a consignor, the
secured party shall account to and pay a debtor for any surplus; and
- (2) the obligor is liable for any deficiency.
- (e) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes,
- (1) the debtor is not entitled to any surplus; and
- (2) the obligor is not liable for any deficiency.
- (f) The surplus or deficiency after a disposition is calculated based on the amount of proceeds that would have been
realized in a disposition complying with AS 45.29.601
- 45.29.628 to a transferee other than the secured
party, a person related to the secured party, or a secondary obligor if
- (1) the transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor;
- (2) the amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to
a person other than the secured party, a person related to the secured party, or a secondary obligor would have
- (g) A secured party who receives cash proceeds of a disposition in good faith and without knowledge that the receipt
violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest
or agricultural lien under which the disposition is made
- (1) takes the cash proceeds free of the security interest or other lien;
- (2) is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security
interest or other lien; and
- (3) is not obligated to account to or pay the holder of the security interest or other lien for any surplus.
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