KRS 355.12-104: Rights in controllable account, controllable electronic record, and

controllable payment intangible.

(1) This section applies to the acquisition and purchase of rights in a controllable

account or controllable payment intangible, inc luding the rights and benefits under

subsections (3), (4), (5), (7), and (8) of this section of a purchaser and qualifying

purchaser, in the same manner this section applies to a controllable electronic

record.

(2) To determine whether a purchaser of a con trollable account or a controllable

payment intangible is a qualifying purchaser, the purchaser obtains control of the

account or payment intangible if it obtains control of the controllable electronic

record that evidences the account or payment intangible.

(3) Except as provided in this section, law other than this article determines whether a

person acquires a right in a controllable electronic record and the right the person

acquires.

(4) A purchaser of a controllable electronic record acquires all righ ts in the controllable

electronic record that the transferor had or had power to transfer, except that a

purchaser of a limited interest in a controllable electronic record acquires rights

only to the extent of the interest purchased.

(5) A qualifying purc haser acquires its rights in the controllable electronic record free

of a claim of a property right in the controllable electronic record.

(6) Except as provided in subsections (1) and (5) of this section for a controllable

account and a controllable payme nt intangible or law other than this article, a

qualifying purchaser takes a right to payment, right to performance, or other interest

in property evidenced by the controllable electronic record subject to a claim of a

property right in the right to paymen t, right to performance, or other interest in

property.

(7) An action may not be asserted against a qualifying purchaser based on both a

purchase by the qualifying purchaser of a controllable electronic record and a claim

of a property right in another con trollable electronic record, whether the action is

framed in conversion, replevin, constructive trust, equitable lien, or other theory.

(8) Filing of a financing statement under Article 9 of this chapter is not notice of a

claim of a property right in a controllable electronic record.