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All Jurisprudence based

0 tracked cards Civil Law and Land Titles and Deeds

Creditor: Polaris Capital Partners, LLC. Debtor: Aurora Pacific Manufacturing, Inc. The loan is secured by a security interest in Debtor's funds held in a Cash Management Account (CMA) at Bank Orion. A Control Agreement is executed among Debtor, Bank Orion, and Polaris, providing that Bank Orion will honor Polaris's instructions regarding the CMA and will not permit withdrawals by Debtor without Polaris's directive. Debtor defaults, and Bank Orion complies with Polaris's directives, preventing any withdrawal by Debtor. (a) Has Polaris's security interest been perfected by control? (b) State the governing rule and the essential elements for perfection by control under RA 11057. (c) If Debtor terminates CMA at Bank Orion and opens a new CMA at Bank Helios, what is the effect on Polaris's control and perfection, and what steps are necessary to preserve perfection?

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Perfection continues only if Polaris executes a new Control Agreement with Bank Helios establishing control over the new CMA. Polaris must notify all other creditors; no additional action needed. Yes; the control continues automatically so perfection remains. No; perfection ends when CMA is closed, regardless of new arrangement.

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