PMSI Special Rules

Question 1

Purchase Money Security Interest (PMSI): Seller financed

Answer 1

1) secured party sells debtor collateral on credit
2) retains a security interest
“A buys equipment from B on credit, B retains a security interest in the equipment”

Question 2

PMSI: financier-finance

Answer 2

1) an enabling loan: a loan to a debtor that enables the debtor to buy specific collateral
2) creditor takes security interest in the specific collateral
3) credit or loan must actually be used to purchase the collateral otherwise not valid

Question 3

PMSI v. Lien creditor

Answer 3

1) if PMSI files within 20 days after the debtor receives possession of the collateral
2) takes priority over the rights of a lien creditor which arises between the time the security interest attaches and the time of filing

Question 4

PMSI v. PMSI

Answer 4

Seller PMSI priority over financier PMSI

Question 5

PMSI in inventory or livestock v. SP

Answer 5

1) PMSI wins IF
2) before debtor receives possession
3) secured party perfects, and sends an authenticated notification to holds of previously filed conflicting security interests in the collateral
4) holder must receive notice within 5 years

Question 6

PMSI in goods other than inventory or livestock v. SP

Answer 6

1) PMSI wins

2) IF PMSI is perfected at the time debtor received possession of the collateral or within 20 days thereafter

Question 7

PMSI in fixtures v. real estate

Answer 7

PMSI takes priority if perfected by a fixture filing before the goods become fixtures or within 20 days