2.8 Special Rules for the Disposition of Consumer Goods and Investment Securities

• Library: Enforcement of Liens and Judgments in Virginia (Virginia CLE) (2019 Ed.)

2.8 SPECIAL RULES FOR THE DISPOSITION OF CONSUMER GOODS AND INVESTMENT SECURITIES

2.801 Consumer Goods. section 8.9A-620(e) of the Virginia Code requires the secured party to sell, lease, or otherwise dispose of consumer goods pursuant to section 8.9A-610 90 days after repossession if:

	1.	The debtor has paid 60 percent of the cash price in the case of a purchase money security interest; or
2.	The debtor has paid 60 percent of the principal amount of the loan in the case of a non-purchase money security interest; and
3.	The debtor has not waived the right to require disposition of the collateral under section 8.9A-620(e) by an agreement entered into and authenticated after default. 157

2.802 Compliance With the Securities Act. Any attempt by a holder of a security interest in instruments that are securities, as that term is defined in the Securities Act of 1933, ¹⁵⁸ to foreclose the security interest without careful reference to and compliance with the requirements of the Securities Act of 1933 (the "Act") may result in the secured party's violating the registration requirements of the Act. ¹⁵⁹

A. Registration. A violation may occur if the securities in question were not issued pursuant to a registration under the Act, or if the pledgor is a control person (as defined in the Act). Securities may be sold only if they are registered under the Act or if there is an available exemption from such registration.

B. Restricted Transferability. While the certificates for some securities will contain "legends" indicating that transfer is restricted, the

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absence of a legend does not mean that transfer is unrestricted. Restricted transferability arises not from a legend but from applicable federal...