N.Y. U.C.C. 9-617

Section 9--617. Rights of Transferee of Collateral.\n (a) Effects of disposition. A secured party's disposition of\ncollateral after default:\n (1) transfers to a transferee for value all of the debtor's\n rights in the collateral;\n (2) discharges the security interest under which the disposition\n is made; and\n (3) discharges any subordinate security interest or other\n subordinate lien other than liens created under any law of\n this state that are not to be discharged.\n (b) Rights of good-faith transferee. A transferee that acts in good\nfaith takes free of the rights and interests described in subsection\n(a), even if the secured party fails to comply with this article or the\nrequirements of any judicial proceeding.\n (c) Rights of other transferee. If a transferee does not take free of\nthe rights and interests described in subsection (a), the transferee\ntakes the collateral subject to:\n (1) the debtor's rights in the collateral;\n (2) the security interest or agricultural lien under which the\n disposition is made; and\n (3) any other security interest or other lien.\n