Rights of transferee of collateral.

1. Effects of disposition. A secured party’s disposition of collateral after default: a. transfers to a transferee for value all of the debtor’s rights in the collateral; b. discharges the security interest under which the disposition is made; and c. discharges any subordinate security interest or other subordinate lien. 2. Rights of good-faith transferee. A transferee that acts in good faith takes free of the rights and interests described in subsection 1 , even if the secured party fails to comply with this Article or the requirements of any judicial proceeding. 3. Rights of other transferee. If a transferee does not take free of the rights and interests described in subsection 1 , the transferee takes the collateral subject to: a. the debtor’s rights in the collateral; b. the security interest or agricultural lien under which the disposition is made; and c. any other security interest or other lien. 2000 Acts, ch 1149, §115, 187