Priority Flashcards

1
Q

When does a judicial lien creditor have priority over a perfected SI?

A

Never

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2
Q

When does a judicial lien creditor have priority over an unperfected SI?

A

Always, except when the SI was unperfected solely b/c the SP had not yet given value

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3
Q

When does a PMSI have priority over a judicial lien creditor?

A

When it is perfected within 20 days after the debtor receives possession of the collateral, the PMSI has priority over a lien that arose between attachment of SI and filing

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4
Q

When does an SI securing an advance subordinate to a lien creditor’s rights?

A

When the advance is made 45 days after the person becomes a lien creditor, unless the advance is made without knowledge of the lien.

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5
Q

When does a statutory (e.g., mechanic’s) lien have priority of an SI?

A

Always, if (1) the lien depends on the lienholder’s possession of the goods, and (2) the lien secures payment or performance in the ordinary course of the person’s business

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6
Q

What takes priority between two perfected security interests?

A

The first to file, then the first to perfect. Lapse restarts the clock

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7
Q

When does a consumer buyer take free of a security interest, a la garage sale?

A
  1. Buy consumer goods for value
  2. For personal use
  3. From a consumer seller
  4. Without knowledge of the SI
  5. The SP has no filed a FS covering the goods
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8
Q

When does a buyer in the ordinary course of business take free of a security interest?

A
  1. Buys from merchant
  2. In ordinary course of merchant’s business
  3. in GF and w/o notice of SP’s rights
  4. Merchant is engaged in sale of goods and NOT a pawnbroker
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9
Q

When does a purchaser of chattel paper have priority over a security interest?

A
  1. Gives new value and has possession or control
  2. Buys in GF and in the ordinary course of business
  3. Chattel paper does not indicate an assignment, or a purchase made w/o knowledge of SP’s rights
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10
Q

When does a buyer of a negotiable instrument or document take free of a security interest?

A

Always

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11
Q

When does a buyer of goods not in the ordinary course of business take free of a security interest?

A

A buyer takes free of any SI securing an advance made after the earlier of (1) the time the SP acquires knowledge of purchase or (2) 45 days after purchase

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12
Q

When does a buyer of goods not in the ordinary course of business NOT take free of a security interest?

A

A buyer takes subject to the SI if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchases and before the expiration of the 45-day period

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13
Q

When does a transferee of money or funs take free of an SI?

A

Generally always, but a debtor is not a transferee

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14
Q

Which has priority, an Article 2 or an Article 9 SI?

A

Article 2

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15
Q

Which has priority, a perfected or unperfected SI

A

Always perfected SI

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16
Q

Which has priority between two unperfected SIs?

A

First to attach has priority

17
Q

Which has priority, a PMSI or non-PMSI?

A

Usually a PMSI, subject to exceptions

18
Q

Which has priority, a PMSI in goods other than inventory, or any other SI?

A

A PMSI has priority if perfected before or within 20 days after the debtor receives possession of collateral

19
Q

Which has priority, a PMSI in inventory or livestock, or any other SI?

A

A PMSI has priority if perfected by the time the debtor receives possession, AND the purchase-money SP sends authenticated notice to the PMSI holdder of any conflicting SI before the debtor receives possession

20
Q

What has priority between two perfected PMSIs?

A

First to file or perfect has priority, BUT a seller PMSI has priority over a lender PMSI

21
Q

When does an SI in fixtures have priority over a real property interest?

A

Generally, an SI in fixtures has priority over the real property interest if the SI in fixtures is perfected by a fixture filing before the real property interest is recorded

22
Q

Which has priority, a perfected SI in fixtures or a subsequent judicial lien?

A

Perfected SI in fixtures

23
Q

When does a PMSI in fixtures have priority over a prior real property interest?

A

A PMSI in fixtures has priority if it is perfected by a fixture filing before the goods become fixtures, or within 20 days thereafter

24
Q

When does a prior construction mortgage have priority over an SI in fixtures?

A

When recorded before the goods become fixtures