When a financing statement is registered to perfect a security interest in collateral, it is the responsibility of the secured party to monitor the registration to ensure that a new financing statement is filed if the goods move jurisdictions. A recent decision by the Ontario Superior Court of Justice1 emphasizes this point.

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A discharge is effective whether or not the secured party intended to discharge that particular registration.  That was the decision of the United States Court of Appeals for the Second Circuit,1 which left JP Morgan unsecured for $1.5 billion as a result of a paperwork mix-up. Case law in Ontario and elsewhere in Canada suggests that the decision here would be the same.  Conseq

In recent years, manufacturers and lessors of heavy industrial equipment have installed sophisticated systems into their units which require a computer code be entered in order for the equipment to operate. This computer code may need to be updated or changed periodically. If the purchaser or lessee is in arrears in making payment to the manufacturer or lessor, the manufacturer or lessor may refuse to supply the debtor with the new access code. In effect, the manufacturer or lessor has the ability to remotely render the equipment unusable.

On 5 October 2011 Justice Barrett of the Supreme Court of NSW handed down a decision in Centro Retail Limited and Centro MCS Manager Limited in its capacity as Responsible Entity of the Centro Retail Trust [2011] NSWSC 1175 (“Centro”) where he found that the responsible entity of Centro Retail Trust would be justified in modifying the constitution of the trust without unitholder approval to a insert a provision permitting the issue of units at a price different to that provided for by the pre-existing provisions.

A recent decision of the Alberta Queen’s Bench1 has raised some questions about purchase-money security interest (“PMSI”) proceeds and cross-collateralization of assets secured by these types of security interests. It has been suggested that this decision is unique and establishes that using a PMSI as collateral for other indebtedness of the debtor is dangerous. But is this decision really so radical?

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