                                 CODE OF VIRGINIA

RIGHTS OF TRANSFEREE OF COLLATERAL (§ 8.9A-617)

a. Effects of disposition. A secured party&#8217;s disposition of collateral
after default:

   1. transfers to a transferee for value all of the debtor&#8217;s rights in the
   collateral;

   2. discharges the security interest under which the disposition is made; and

   3. discharges any subordinate security interest or other subordinate lien.

b. Rights of good-faith transferee. A transferee that acts in good faith takes
free of the rights and interests described in subsection (a), even if the
secured party fails to comply with this title or the requirements of any
judicial proceeding.

c. Rights of other transferee. If a transferee does not take free of the rights
and interests described in subsection (a), the transferee takes the collateral
subject to:

   1. the debtor&#8217;s rights in the collateral;

   2. the security interest or agricultural lien under which the disposition is
   made; and

   3. any other security interest or other lien.

HISTORY: 1964, c. 219, § 8.9-504; 1973, c. 509; 2000, c. 1007.