PMSI

Question 1

Lendor’s PMSi

Answer 1

-secured party gives value to the debtor in order to enable the debtor to acquire rights in or the use of goods and the value given was so used

Question 2

Lender PMSI example

Answer 2

B loans P $2k to buy a new piano (and secured by the piano) and P does in fact use the $ to purchase a new piano. B has a PMIS in piano
(but not if he used $ for something else; must still attach before PMSI created)

Question 3

consignment of goods

Answer 3

PMSI in inventory

Question 4

SEller’s PMSI

Answer 4

-secured party sold goods to the debtor and the debtor incursan obligation to pay the secured party all or part of the purchase prise

Question 5

Seller PMSI example

Answer 5

S sells paino to P for $2k on credit pursuant to a SA under which S retains a SI in the piano. S has a PMSI in the piano

Question 6

PMSI in software

Answer 6

-exists only where the debtor acquired its interest in software in an integrated transaction in which debtor also acquired an interest in goods and the debtor acquired that interest in the software for the principal purpose of using software in the goods

Question 7

Cosignments

Answer 7

• some may fall under Art. 9 as a PMSI in consigned inventory
• to be subj to art 9, must meet:
  1) person (consignor) must deliver goods to a merchant who deals in goods of that kind for the merchant to sell
  2) merchant is not generally known by its creditors to be substantially engaged in selling foods for others or is not an auctioneer
  3) value of the goods delivered in each delivery must be at least $1k AND
  4) goods must not be consumer goods immediately before the delivery

Question 8

dual status PMSI

Answer 8

• non-CG transaction, collateral does not lose its PMSI status merely because it:
  1) also secures another obligaton OR
  2) the underlying obligation is also secured by other non-PMSi collateral OR
  3) the underlying obligation has been renewed, refinanced, or restructured