In re Pfautz
United States Bankruptcy Court for the Western District of Missouri
264 B.R. 551 (2001)
Jerry and Suzanne Pfautz (the Pfautzes) granted Liberty Bank a security interest in uncertificated securities and later, with Liberty Bank, established a separate collateral account at State Street Bank and Trust Company (State Street) holding those securities, under an agreement giving Liberty Bank the right to dispose of the securities upon default (though not expressly stating Liberty Bank could sell them without the Pfautzes' consent). After the Pfautzes filed for bankruptcy, Liberty Bank moved for relief from the automatic stay to sell the collateral, and the bankruptcy trustee opposed, arguing Liberty Bank's security interest was never perfected.
Whether, under the Uniform Commercial Code, perfection of a security interest in an uncertificated security by control can be accomplished by having an agreement that the secured party can sell the securities upon default.