§ 4-9-330 — Priority of purchaser of chattel paper or instrument

Colorado § 4-9-330

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Secured Transactions

Text

(a) A
purchaser of chattel paper has priority over a security interest in the chattel paper
which is claimed merely as proceeds of inventory subject to a security interest if:

(1) In good faith and in the ordinary course of the purchaser's business, the
purchaser gives new value, takes possession of each authoritative tangible copy of
the record evidencing the chattel paper, and obtains control under section 4-9-105
of each authoritative electronic copy of the record evidencing the chattel paper;
and

(2) The authoritative copies of the record evidencing the chattel paper do not
indicate that the chattel paper has been assigned to an identified assignee other
than the purchaser.

(b) A purchaser of chattel paper has priority over a security interest in the
chattel paper which is claimed other than merely as proceeds of inventory subject
to a security interest if the purchaser gives new value, takes possession of each
authoritative tangible copy of the record evidencing the chattel paper, and obtains
control under section 4-9-105 of each authoritative electronic copy of the record
evidencing the chattel paper in good faith, in the ordinary course of the purchaser's
business, and without knowledge that the purchase violates the rights of the
secured party.

(c) Except as otherwise provided in section 4-9-327, a purchaser having
priority in chattel paper under subsection (a) or (b) of this section also has priority in
proceeds of the chattel paper to the extent that:

(1) Section 4-9-322 provides for priority in the proceeds; or

(2) The proceeds consist of the specific goods covered by the chattel paper
or cash proceeds of the specific goods, even if the purchaser's security interest in
the proceeds is unperfected.

(d) Except as otherwise provided in section 4-9-331 (a), a purchaser of an
instrument has priority over a security interest in the instrument perfected by a
method other than possession if the purchaser gives value and takes possession of
the instrument in good faith and without knowledge that the purchase violates the
rights of the secured party.

(e) For purposes of subsections (a) and (b) of this section, the holder of a
purchase-money security interest in inventory gives new value for chattel paper
constituting proceeds of the inventory.

(f) For purposes of subsections (b) and (d) of this section, if the authoritative
copies of the record evidencing chattel paper or an instrument indicates that the
chattel paper or instrument has been assigned to an identified secured party other
than the purchaser, a purchaser of the chattel paper or instrument has knowledge
that the purchase violates the rights of the secured party.

Legislative History

Source: L. 2001: Entire article R&RE, p. 1364, � 1, effective July 1. L. 2023: (a), (b), and (f) amended, (SB 23-090), ch. 136, p. 556, � 66, effective August 7.