Delivering stock to a creditor as security for a debt owed by the shareholder:

Question

Quizplus · Accepted Answer

Delivering stock to a creditor as security for a debt owed by the shareholder creates a security interest in the stock. However, to perfect the security interest, the creditor must file the appropriate documents with the relevant authorities. Once the security interest is perfected, the creditor's claim to the stock is superior to that of the shareholder.

Delivering Stock to a Creditor as Security for a Debt