Priority Flashcards
What is the priority of the different types of creditors?
- B I OC (buyer in ordinary course)
- P A C (perfected attached creditor)
- LC (lien creditor)
- NOCie (non-ordinary court buyer)
- A U Pie (attached imperfects creditor)
- G U C (general unsecured creditor)
- Debtor
What is the buyer in the ordinary course?
Someone who purchases the collateral from the merchant’s inventory.
What’s the perfected attach creditor?
An article 9 lender who attached and perfected their interest.
Who is a lien creditor?
A general unsecured creditor which goes to court to get a judicial lien on the collateral.
Who is a non-ordinary course buyer?
Someone who purchases the collateral outside the ordinary stream of commerce
Who is unattached and perfected creditor?
And article 9 creditor who creates unenforceable security interest, but either does not perfect it or makes an error in filing.
Who is the general unsecured creditor?
A lender that never bothers to take collateral
What does relation back mean?
For the purposes of determining priority, article 9 will allow a creditor to file early, even at the onset of lower negotiations. The priority then attaches from the date of that early filing.
What interest does an after-acquired collateral financier take?
A security interest in all of debtor’s collateral, whether held now or hereafter.
In a competition between an AACF and a PMSI who will take priority for collateral that is equipment?
The PSMI-holder will take priority, provided they file within 20 days after the debtor takes possession of the equipment.
In a competition between an AACF and a PMSI who will take priority for collateral that is inventory?
The PSMI-holder must file properly BEFORE debtor takes possession
And
Notify bank BEFORE the debtor take possession.
