priority battles Flashcards
what is the general rule who has priority
first to file (or perfect)
what is X/C for first to file
control of investment property or possession of notes or chattel paper
lien creditor
if secured creditor perfected b4 lien arises, the secured creditor wins, if not lien creditor wins
buyers in ordinary course of business general rule
GR: a perfected SI follows collateral into the hands of
the buyer
- (buyers who pay for and take delivery of collateral b4 perfection are unaffected by SI)
- BIOC buys goods in the ordinary course of business from a S engaged in business of selling them.
- BIOC can take goods free of nonpossessory SI created by the S UNLESS they know the sale violates a SA.
x/c for buyers in ordinary course of business
inventory sold in the ORDINARY COURSE of the debtor’s business is generally no longer subject to the debtor’s lender’s security interests
PMSI x/c for first to file (equipment)
PMSI perfected W/I 20 DAYS of debtor RECEIVING DELIVERY beats all other secured creditors and lien creditors
PMSI in inventory x/c first to file
super-priority if do 2 things
1) perfect PMSI BEFORE received and
2) notify an secured creditor with a filed-perfected competing interest in after-acquired inventory in writing that PMSI creditor has/expects to have a PMSI in described collateral
what is the general rule for perfected security interest in goods against subsequent buyers.
GR: a perfected SI in goods is good against subsequent buyer
x/c for buyer of (consumer) goods who sells them (garage sale rule)
a buyer of consumer goods resells them to another consumer for value that second consumer takes free SI of which he has no knowledge, provided new buyer makes the purchase before any UCC 1 covering goods is filed
garage sale rule
1) a buyer of consumer goods resells them to
2) another consumer for
3) VALUE
4) w/o knowledge of SI takes free of goods of SI
x/c if there is a UCC 1 covering goods before the new buyer buys the goods, then takes with the SI
