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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:#403152'>You have to look at the factoring agreement. When I went “in house” for a time, one of my additional duties was to serve as President of our factoring subsidiary. Caveat – though I have “been there, done that” I am doing this from memory. Factors operate on one of two bases. Either they loan against the receivables, or they buy them. If they buy them they may only buy the receivables (most likely) or there may be an effort to assign the contract (less likely). Your first question is to decide whether it was a sale or loan. If a sale, in the unlikely event there was an attempt to assign the contract, consider the effect of an unlicensed factor attempting to enforce a construction contract. If a loan, check the contract clauses authorizing the factor (secured party?) to proceed directly against the collateral. Look for notice requirements, waiting periods, or anything else that would impede the secured party’s (factor’s) right to demand the account debtor pay it rather than the debtor. Next you need to look at perfection. If you decide under 679.302 that perfection by financing statement was required, determine whether it was done and done correctly. More than a few priority disputes have been lost because of improper filing, poor collateral descriptions, etc. Although 679.318 may not help, you should consider it. Do estoppel or waiver theories help at all? Good luck!<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:#403152'><o:p> </o:p></span></p><div><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:#5F497A'>Regards,<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:#5F497A'>Lan White<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:#5F497A'>(727) 797-5599<o:p></o:p></span></p></div><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:#403152'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] <b>On Behalf Of </b>Croom, Janet<br><b>Sent:</b> Monday, February 13, 2012 2:46 PM<br><b>To:</b> RPPTL constructionlaw<br><b>Subject:</b> [RPPTL-constructionlaw] UCC Factoring Agreements and Subs Gone Out of Business<o:p></o:p></span></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:blue'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:blue'>Hypothetical: Client is Sub which has Sub-Sub that goes out of business. Before going out of business, Sub-Sub retains Accounts Receivable company. Pursuant to UCC/Florida statutes, Sub makes payments to A/R firm, but accidently pays Sub-Sub 2 times. Sub-Sub gone. A/R company pursuing Sub for 2 “unauthorized” payments made directly to Sub-Sub, rather than A/R company. Additional facts which may/may not be relevant: Bonded job; Request for Sworn Statement of Account and 10 Day Written Notice Of Intent To Pay were served on Sub-Sub before it went out of business, with no response, but I am not sure any of that matters in the UCC world. Close to 6 figures at stake for Sub having to essentially “pay twice.”<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:blue'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:blue'>Query: Anyone been successful in protecting construction client that is being pursued by an A/R “factoring” company under the UCC/Florida statutes? <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:blue'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Times New Roman","serif";color:blue'><o:p> </o:p></span></p><div><p class=MsoNormal><strong><span style='font-size:13.5pt;font-family:"Staccato222 BT";color:black'>Janet Carney Croom, Esquire</span></strong><span style='color:blue'><o:p></o:p></span></p><p class=MsoNormal><strong><span style='font-family:"Calibri","sans-serif";color:black'>Board Certified - Construction Law <o:p></o:p></span></strong></p><p class=MsoNormal><strong><span style='font-family:"Calibri","sans-serif";color:black'>Board Certified - Business Litigation<o:p></o:p></span></strong></p><p class=MsoNormal><span style='color:black'>Collins, Brown, Caldwell, Barkett & Garavaglia, Chartered</span><span style='color:blue'><o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>756 Beachland Boulevard<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Vero Beach, FL 32963<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Telephone: 772-231-4343<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Fax: 772-234-5213<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'><a href="blocked::mailto:jburgess@verolaw.com" title="blocked::mailto:jburgess@verolaw.com
mailto:jburgess@verolaw.com">jcroom@verolaw.com</a></span><span style='color:#003300'><o:p></o:p></span></p><p class=MsoNormal><span style='color:#003300'><a href="blocked::mailto:www.cbc@verolaw.com" title="blocked::mailto:www.cbc@verolaw.com
mailto:www.cbc@verolaw.com">http://www.verolaw.com</a><o:p></o:p></span></p><p class=MsoNormal><i><span style='font-size:10.0pt;color:black'>The information contained in this message is legally privileged and confidential. It is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, any dissemination, distribution, or copy of this message is strictly prohibited. If you have received this message in error, please immediately notify the sender by via telephone, email, or the U.S. Postal service at the address above, and destroy the message. Thank you</span></i><span style='color:black'><o:p></o:p></span></p></div><div><div class=MsoNormal align=center style='text-align:center'><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'><hr size=2 width="100%" align=center></span></div></div></div></body></html>