§ 9205 — Use or disposition of collateral permissible

(a) When security interest not invalid or fraudulent.--A security interest is not invalid or fraudulent against creditors solely because any of the following apply:

(1) The debtor has the right or ability to:

(i) use, commingle or dispose of all or part of the collateral, including returned or repossessed goods;

(ii) collect, compromise, enforce or otherwise deal with collateral;

(iii) accept the return of collateral or make repossessions; or

(iv) use, commingle or dispose of proceeds.

(2) The secured party fails to require the debtor to account for proceeds or replace collateral.

(b) Requirements of possession not relaxed.--This section does not relax the requirements of possession if attachment, perfection or enforcement of a security interest depends upon possession of the collateral by the secured party.