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Article: Seventh Circuit Says Secured Party[acute accent]s Signature Is Not Needed to Validate a Security Agreement. Is This Correct?(United States Court of Appeals for the Seventh Circuit )
- Article from:
- Mondaq Business Briefing
- Article date:
- October 17, 2002
CopyrightCOPYRIGHT 2002 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The United States Court of Appeals for the Seventh Circuit ruled in In re Vic Supply Company, Inc. (Falconbridge U.S., Inc. vs. Bank One Illinois, N.A.,), 227 F.3d 928, 42 UCC Rep. Serv. 2d 385 (7th Cir., 2000) that a bank did not have to sign a security agreement in order for it to be effective against third parties, despite the fact that the agreement specifically stated that it would become effective only when "accepted by the Bank."
The case arose as a dispute between two creditors of a bankrupt company known as Vic Supply Company ("Vic"). One of the creditors was Bank One, which presumably had a first priority security interest in all of the assets of the ...