N.D. Cent. Code § 41-09-108
(9-611) Notification before disposition of collateral
Redline — December 1, 2021 → current.View current text →
Current — January 1, 2022
As of December 1, 2021
(1) In this section, “notification date” means the earlier of the date on which: A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or
(1) In this section, “notification date” means the earlier of the date on which: A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or
(2) The debtor and any secondary obligor waive the right to notification.
(2) The debtor and any secondary obligor waive the right to notification.
(3) Except as otherwise provided in subsection 4, a secured party that disposes of collateral under section 41-09-107 shall send to the persons specified in subsection 3 a reasonable authenticated notification of disposition.
(3) Except as otherwise provided in subsection 4, a secured party that disposes of collateral under section 41-09-107 shall send to the persons specified in subsection 3 a reasonable authenticated notification of disposition.
(4) To comply with subsection 2, the secured party shall send an authenticated notification of disposition to: The debtor;
(4) To comply with subsection 2, the secured party shall send an authenticated notification of disposition to: The debtor;
(5) Any secondary obligor;
(5) Any secondary obligor;
(6) Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;
(6) Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;
(7) Any other secured party or lienholder that, ten days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that: Identified the collateral;
(7) Any other secured party or lienholder that, ten days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that: Identified the collateral;
(8) Was indexed under the debtor’s name as of that date; and
(8) Was indexed under the debtor’s name as of that date; and
(9) Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and
(9) Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and
(10) Any other secured party that, ten days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in subsection 1 of section 41-09-31.
(10) Any other secured party that, ten days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in subsection 1 of section 41-09-31.
(11) Subsection 2 does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.
(11) Subsection 2 does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.
(12) A secured party complies with the requirements for notification prescribed by paragraph 2 of subdivision c of subsection 3 if: Not later than twenty days or earlier than thirty days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor’s name in the office indicated in paragraph 2 of subdivision c of subsection 3; and
(12) A secured party complies with the requirements for notification prescribed by paragraph 2 of subdivision c of subsection 3 if: Not later than twenty days or earlier than thirty days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor’s name in the office indicated in paragraph 2 of subdivision c of subsection 3; and
(13) Before the notification date, the secured party: Did not receive a response to the request for information; or
(13) Before the notification date, the secured party: Did not receive a response to the request for information; or
(14) Received a response to the request for information and sent an authenticated notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.
(14) Received a response to the request for information and sent an authenticated notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.
(15) Second Try. This Article leaves to judicial resolution, based upon the facts of each case, the question whether the requirement of “reasonable notification” requires a “second try,” i.e., whether a secured party who sends notification and learns that the debtor did not receive it must attempt to locate the debtor and send another notification.
(16) Recognized Market; Perishable Collateral. New subsection (d) makes it clear that there is no obligation to give notification of a disposition in the case of perishable collateral or collateral customarily sold on a recognized market (e.g., marketable securities). Former Section 9-504(3) might be read (incorrectly) to relieve the secured party from its duty to notify a debtor but not from its duty to notify other secured parties in connection with dispositions of such collateral.
(17) Failure to Conduct Notified Disposition. Nothing in this Article prevents a secured party from electing not to conduct a disposition after sending a notification. Nor does this Article prevent a secured party from electing to send a revised notification if its plans for disposition change. This assumes, however, that the secured party acts in good faith, the revised notification is reasonable, and the revised plan for disposition and any attendant delay are commercially reasonable.
(18) Waiver. A debtor or secondary obligor may waive the right to notification under this section only by a post-default authenticated agreement. See Section 9-624(a).
Official source: North Dakota Legislative Branch. Reproduced from public-domain North Dakota statutes; confirm against the official source for the current text. Not legal advice.