N.Y. Uniform Commercial Code Law § 9-622: Effect of Acceptance of Collateral

Section 9--622. Effect of Acceptance of Collateral.

(a) Effect of acceptance. A secured party's acceptance of collateral

in full or partial satisfaction of the obligation it secures:

(1) discharges the obligation to the extent consented to by the

debtor;

(2) transfers to the secured party all of a debtor's rights in

the collateral;

(3) discharges the security interest or agricultural lien that is

the subject of the debtor's consent and any subordinate

security interest or other subordinate lien; and

(4) terminates any other subordinate interest.

(b) Discharge of subordinate interest notwithstanding noncompliance. A

subordinate interest is discharged or terminated under subsection (a),

even if the secured party fails to comply with this article.