9615 - Application of proceeds of disposition; liability for deficiency and right to surplus.

     § 9615.  Application of proceeds of disposition; liability for                deficiency and right to surplus.        (a)  Application of proceeds.--A secured party shall apply or     pay over for application the cash proceeds of disposition under     section 9610 (relating to disposition of collateral after     default) in the following order to:            (1)  The reasonable expenses of retaking, holding,        preparing for disposition, processing and disposing and, to        the extent provided for by agreement and not prohibited by        law, reasonable attorney fees and legal expenses incurred by        the secured party.            (2)  The satisfaction of obligations secured by the        security interest or agricultural lien under which the        disposition is made.            (3)  The satisfaction of obligations secured by any        subordinate security interest in or other subordinate lien on        the collateral if:                (i)  the secured party receives from the holder of            the subordinate security interest or other lien an            authenticated demand for proceeds before distribution of            the proceeds is completed; and                (ii)  in a case in which a consignor has an interest            in the collateral, the subordinate security interest or            other lien is senior to the interest of the consignor.            (4)  A secured party that is a consignor of the        collateral if the secured party receives from the consignor        an authenticated demand for proceeds before distribution of        the proceeds is completed.        (b)  Proof of subordinate interest.--If requested by a     secured party, a holder of a subordinate security interest or     other lien shall furnish reasonable proof of the interest or     lien within a reasonable time. Unless the holder does so, the     secured party need not comply with the holder's demand under     subsection (a)(3).        (c)  Application of noncash proceeds.--A secured party need     not apply or pay over for application noncash proceeds of     disposition under section 9610 unless the failure to do so would     be commercially unreasonable. A secured party that applies or     pays over for application noncash proceeds shall do so in a     commercially reasonable manner.        (d)  Surplus or deficiency if obligation secured.--If the     security interest under which a disposition is made secures     payment or performance of an obligation, after making the     payments and applications required by subsection (a) and     permitted by subsection (c):            (1)  unless subsection (a)(4) requires the secured party        to apply or pay over cash proceeds to a consignor, the        secured party shall account to and pay a debtor for any        surplus; and            (2)  the obligor is liable for any deficiency.        (e)  No surplus or deficiency in sales of certain rights to     payment.--If the underlying transaction is a sale of accounts,     chattel paper, payment intangibles or promissory notes:            (1)  the debtor is not entitled to any surplus; and            (2)  the obligor is not liable for any deficiency.        (f)  Calculation of surplus or deficiency in disposition to     person related to secured party.--The surplus or deficiency     following a disposition is calculated based on the amount of     proceeds which would have been realized in a disposition     complying with this chapter to a transferee other than the     secured party, a person related to the secured party or a     secondary obligor if:            (1)  the transferee in the disposition is the secured        party, a person related to the secured party or a secondary        obligor; and            (2)  the amount of proceeds of the disposition is        significantly below the range of proceeds which a complying        disposition to a person other than the secured party, a        person related to the secured party or a secondary obligor        would have brought.        (g)  Cash proceeds received by junior secured party.--A     secured party that receives cash proceeds of a disposition in     good faith and without knowledge that the receipt violates the     rights of the holder of a security interest or other lien which     is not subordinate to the security interest or agricultural lien     under which the disposition is made:            (1)  takes the cash proceeds free of the security        interest or other lien;            (2)  is not obligated to apply the proceeds of the        disposition to the satisfaction of obligations secured by the        security interest or other lien; and            (3)  is not obligated to account to or pay the holder of        the security interest or other lien for any surplus.        Cross References.  Section 9615 is referred to in sections     9602, 9616, 9623, 9626 of this title.