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Application of proceeds of disposition; liability for deficiency and right to surplus - 13 Pa. Cons. Stat. § 9615

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     § 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.

Last modified: November 27, 2007