4. Priority Flashcards

1
Q

Cast of Characters

What are the six groups of creditors, in order of priority?

A

BPL NAG

  1. Buyer in ordinary course
  2. Perfect attached creditor
  3. Lien creditor
  4. Non-ordinary course buyer
  5. Attached unperfected creditor
  6. General unsecured creditor
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2
Q

Cast of Characters

Who is a buyer in ordinary course?

A

Someone who purchases the collateral from merchant’s inventory

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3
Q

Cast of Characters

Who is a perfect attached creditor?

A

Article 9 CR who perfects

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4
Q

Cast of Characters

Who is a perfect attached creditor?

A

Article 9 CR who perfects

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5
Q

Cast of Characters

Who is a lien creditor?

A

An unsecured CR who goes to court to enforce

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6
Q

Cast of Characters

Who is a non-ordinary course buyer?

A

Someone who purchases the collateral from a non-merchant

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7
Q

Cast of Characters

Who is an attached unperfected creditor?

A

Article 9 CR with an unenforceable interest, i.e. not filed or improperly filed

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8
Q

Cast of Characters

Who is a general unsecured creditor?

A

Lender who takes no collateral

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9
Q

PAC v the world

Who beats a PAC in priority?

A
  1. Earlier PACs
  2. BIOCs
  3. PMSI holders in X where PAC is an AACF and X is part of DR’s future inventory
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10
Q

PAC v the world

What is the general for priority?

A

First in time, first in right

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11
Q

PAC v the world

What is early filing, and how does it affect priority?

A

If a lender files during negotiations and the security interest later attaches, priority relates back to the date of filing

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12
Q

PAC AACF v PMSI

How is the contest set up?

A
  • AACF lends money to A and gets security is A’s future business equipment/inventory and perfects
  • A then acquires X from PMSI
  • AACF and PMSI holder have a competing interest in X
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13
Q

PAC AACF v PMSI

When the collateral is equipment, what must PMSI-holder do to prevail over earlier AACF?

A

File properly within 20 days of A taking possession of X

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14
Q

PAC AACF v PMSI

When the collateral is inventory, what must PMSI-holder do to prevail over earlier AACF? How come?

A

File properly and notify AACF before A takes possession

To prevent AACF from being tricked into extending more credit on the basis of the new inventory which could ordinarily be sold

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