N.Y. Uniform Commercial Code Law § 9-205: Use or Disposition of Collateral Permissible

Section 9--205. Use or Disposition of Collateral Permissible.

(a) When security interest not invalid or fraudulent. A security

interest is not invalid or fraudulent against creditors solely because:

(1) the debtor has the right or ability to:

(A) use, commingle, or dispose of all or part of the

collateral, including returned or repossessed goods;

(B) collect, compromise, enforce, or otherwise deal with

collateral;

(C) accept the return of collateral or make repossessions; or

(D) use, commingle, or dispose of proceeds; or

(2) the secured party fails to require the debtor to account for

proceeds or replace collateral.

(b) Requirements of possession not relaxed. This section does not

relax the requirements of possession if attachment, perfection, or

enforcement of a security interest depends upon possession of the

collateral by the secured party.