secured trans themis essays Flashcards
Whether the finance company has an interest in the home entertainment system depends on the status of the buyer
enerally, a security interest that is enforceable against the debtor is said to have “attached” to the collateral. Attachment requires that: (i) value has been given by the secured party, (ii) the debtor has rights in the collateral, and (iii) the debtor has authenticated a security agreement that describes the collateral, or the secured party has possession or control of the collateral pursuant to a security agreement.
Here, the finance company gave value in the form of a $5 million loan, the retailer had rights in its inventory, and the debtor authenticated the loan agreement. Thus, the finance company has a security interest in all the retailer’s present and future inventory. Inventory includes goods, other than farm products, that are held for sale or lease. As a retailer of home electronic equipment, the entertainment system is part of the retailer’s inventory and the financing company’s security interest attached to it.
Perfection of a security interest is generally necessary for the secured party to have rights in the collateral that are superior to any rights claimed by third parties. A security interest in goods can be perfected by filing a financing statement. Here, the finance company perfected its interest in the inventory by properly filing a financing statement.
A buyer of collateral subject to a perfected security interest generally takes the collateral subject to that interest. However, a buyer in the ordinary course of business (BOCB) takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence. A BOCB is a person who: (i) buys goods; (ii) in the ordinary course of business; (iii) from a merchant who is in the business of selling goods of that kind; (iv) in good faith; and (v) without knowledge that the sale violates the rights of another in the same goods. In order to qualify as a buyer, the purchaser must give new value, which in addition to paying cash for the goods includes purchasing the goods on credit.
In this case, the buyer bought the home entertainment system in the ordinary course of the retailer’s business. The buyer purchased the system on credit in good faith and without knowledge of the retailer’s interest. Thus, the buyer is a BOCB and takes the system free of the finance company’s security interest.
If a buyer obtains goods under the BOCB exception free of the security interest in the goods created by the buyer’s seller, the buyer may, in turn, sell the goods to a second buyer who also takes the goods free of that security interest. The second buyer is not required to qualify as a BOCB. Consequently, the friend takes the home entertainment system free of the finance company’s security interest.
At issue is whether the retailer has an interest in the home entertainment system even though it did not file its interest.
If the substance of the transaction is the creation of a security interest, then Article 9 applies regardless of the form of the transaction. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer is limited in effect to a reservation of a security interest. In this case, even though the retailer retained title to the system, the substance of the agreement was to create a security interest, which attached to the entertainment system. The retailer gave value by selling the entertainment system on credit, the buyer had rights in the entertainment system, and the buyer signed an agreement that recognized the retailer’s retention of an interest in the system as security for payment of the remainder of the purchase price.
A PMSI in goods exists when a secured party sold goods to the debtor, and the debtor incurs an obligation to pay the secured party all or part of the purchase price. A PMSI in consumer goods is automatically perfected upon attachment. Consumer goods are those goods acquired primarily for personal, family, or household purposes. Here, the retailer has a PMSI in the system because the buyer purchased the system from the retailer on credit and granted a security interest in the system. The system is a consumer good because the buyer purchased it for use in her home. Thus, the retailer’s PMSI is automatically perfected without filing a financing statement.
A buyer of collateral subject to a perfected security interest generally takes the collateral subject to that interest. However, a consumer buyer of consumer goods takes free of a security interest, even if perfected, unless prior to the purchase the secured party filed a financing statement covering the goods. A consumer buyer is a person who: (i) buys consumer goods for value; (ii) for his own personal, family, or household use; (iii) from a consumer seller; and (iv) without knowledge of the security interest. This is often referred to as the “garage sale” rule.
Here, the friend gave value for the system in the form of a $4,000 check. (Note: Although the buyer agreed to hold the check for 90 days, a check is a negotiable instrument that is payable upon demand, and therefore constitutes value given.) In addition, the friend purchased the system for his own household use, the buyer was a consumer seller because she was not in the business of selling home electronic equipment, and the friend had no knowledge of the retailer’s security interest. Thus, the friend is a consumer buyer of consumer goods. Because the retailer did not file its PMSI, the friend takes the system free of the retailer’s security interest.
At issue is whether the $4,000 check constitutes cash proceeds.
A security interest in collateral automatically attaches to identifiable proceeds. Proceeds include whatever is acquired upon the sale of collateral. If the proceeds are identifiable cash proceeds (which includes checks) and the security interest in the original collateral is perfected, the perfected security interest in the proceeds continues indefinitely.
Here, the retailer had a perfected security interest in the entertainment system. The buyer acquired the $4,000 check from the friend in exchange for the system. Thus, the check is identifiable cash proceeds, and the retailer has a perfected security interest in the check.
Lender has a superior right to the clocks.
a) Lender’s interest in the clocks
Under Article 9, for a security interest to be enforceable against a debtor, the interest must attach to the collateral. For attachment, three conditions must be met: (i) value must be given by the secured party; (ii) the debtor has rights in the collateral; and (iii) the debtor authenticated a security agreement that describes the collateral (or the secured party has possession or control of the collateral pursuant to a security agreement). A debtor may also give a security interest in future rights. Generally, this type of interest is created by including an “after-acquired property clause” in the security agreement. The security interest for after-acquired property attaches as soon as the debtor obtains an interest in the property.
Here, Lender and Decorator properly executed a security agreement granting Lender a security interest in all present and future inventory and equipment, Lender gave value to Decorator, and Decorator had rights in its inventory and equipment. Thus, Lender has an enforceable security interest against Decorator in the clocks, which are inventory.
In order to have priority over a third party who has a security interest in the same collateral, perfection of the security interest is generally necessary. Here, Lender filed a properly completed financing statement on the same day that it made the loan, which made Lender a perfected secured party in Decorator’s present and future inventory and equipment. Because of the after-acquired property clause in the security agreement, Lender has a perfected security interest in the clocks.
Clockwork’s interest in the clocks
While the agreement between Clockwork and Decorator does not appear on its face to be a secured transaction, the essence of their transaction was in fact a secured transaction. UCC Article 9 applies if the substance of a transaction creates a security interest. Under the UCC, the retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer is limited in effect to a reservation of a security interest. Consequently, though the parties did not call their agreement a security agreement, the substance of their transaction is to secure Decorator’s payment for the clocks, and the transaction is governed by Article 9.
Clockwork also has an attached security interest in the clocks. Element one of attachment is satisfied because Clockwork gave value by selling the clocks on credit. Element two is satisfied because Decorator had rights in the clocks. A debtor’s limited rights in collateral are sufficient for a security interest to attach, and here, Decorator took delivery of the clocks and had them in its inventory to sell. Element three is satisfied because the substance of their sales agreement was a transaction to secure payment for the clocks, and Decorator signed the agreement. Thus, Clockwork also has an enforceable security interest against Decorator in the clocks. Moreover, Clockwork has a special kind of security interest called a purchase money security interest (PMSI). A PMSI is a security interest in goods that has priority over other security interests in the same goods. It arises when a creditor sells goods to a debtor on credit and retains a security interest in those goods, or the creditor advances funds, which are then used to purchase the goods and the creditor reserves a security interest in those goods. Here, Clockwork sold 25 clocks as inventory to Decorator on credit and retained a security interest in the clocks. Thus, Clockwork has a PMSI in inventory as to the 25 clocks.
While, generally, a PMSI has priority over other security interests in the same goods, a PMSI in inventory has priority only if: (i) the PMSI is perfected by the time the debtor receives possession of the collateral; and (ii) the purchase-money secured party sends an authenticated notification of the PMSI to the holder of any conflicting security interest before the debtor receives possession of the collateral. Here, Clockwork did neither. Thus, its security interest, although a PMSI, is not perfected.
Under the priority rules of Article 9, a perfected security interest has priority over an unperfected security interest. As a result, Lender has a superior interest in the clocks.
Lender has a superior right to the vacuum.
a) Vac’s interest in the vacuum (25%)
A transaction in the form of a lease is treated as a security interest if the lessee must pay consideration to the lessor for the right to possess and use the goods for the term of the lease, the payment obligation cannot be terminated by the lessee, and the lessee has an option to become the owner of the goods upon completion of the lease agreement. Here, what the parties refer to as a lease is equivalent to a secured sale transaction because Decorator will have purchased the vacuum after making the “lease” payments.
Vac and Decorator have created an enforceable and attached security interest because Vac has given value to Decorator; Decorator has rights in the collateral; and Decorator has signed the agreement. Since Vac is treated as having sold the vacuum to Decorator on credit and retained a security interest in the vacuum, Vac has a PMSI in the vacuum. Because Decorator used the vacuum in its business, and it is not inventory, it is equipment. A PMSI in goods other than inventory or livestock prevails over all other security interests in the collateral, even if they were previously perfected, if the secured party perfects before or within 20 days after the debtor receives possession of the collateral. Here, not only did Vac not perfect its security interest within that time period, it has not perfected it at all. Consequently, Vac’s security interest is unperfected.
b) Lender’s interest in the vacuum (25%)
Decorator gave Lender a security interest in “all of Decorator’s present and future inventory and equipment.” The vacuum is equipment. The security interest is enforceable and attached to the vacuum because Lender gave value (the $10,000 loan), Decorator had rights in the vacuum, and Decorator signed the security agreement. Additionally, Lender perfected its security interest when it filed the completed financing statement.
Because Lender has perfected its security interest and Vac has an unperfected security interest, Lender’s security interest in the vacuum cleaner has priority.
Disabling Equipment
Ion has an enforceable security interest in the proton-therapy equipment (“PT equipment”) because (1) Ion gave value to PTT by providing credit that was used to purchase the PT equipment, (2) PTT acquired rights in the PT equipment upon purchase, and (3) PTT authenticated a security agreement that described the PT equipment and granted Ion the security interest therein.
Under UCC 9, upon a debtor’s default, a secured party may leave equipment collateral in place and render it unusable, as long as doing so is not a breach of the peace. Goods are considered equipment as long as they are not inventory, farm products, or consumer goods. Here, the PT equipment is clearly goods that is not inventory, farm products, or consumer goods. Therefore, because PTT defaulted, Ion may disable the PT equipment if it can do so without breach of the peace. Because Ion can lawfully instruct its technician to disable the PT equipment without any disruption or violence, there is no reason to believe there will be a breach of the peace, and it can do so without incurring any liability for doing so.
Priority of Rights
At issue are the relative rights of a person who has a security interest in the collateral and a mortgagee of the real property to which the collateral is affixed.
Bank has a mortgage on the land and the building in which the PT equipment is located, and the facts also indicate that the equipment became a fixture. Accordingly, Bank’s mortgage extends to the equipment.
Ion has a perfected security interest in the PT equipment. Because value has been given (PT equipment delivered to PTT), PTT has rights therein, and the signed purchase agreement is a security agreement containing a description of the collateral, the security interest is attached. Further, Ion’s security interest is perfected because a financing statement listing the debtor and indicating the collateral was properly filed in the State A Secretary of State, as PTT is a registered organization in State A.
Even if the interest is perfected, however, the general rule is that a security interest in fixtures is subordinate to an interest in the related real property. One exception to this rule is if the security interest in fixtures is a purchase-money security interest and if the holder of that interest filed a fixture filing either before the equipment became a fixture or within 20 days. A fixture filing must provide a description of the real property related to the collateral. In addition, for collateral that is related to real property, the financing statement must be filed in the office for recording a mortgage on the property (local filing), as opposed to other collateral, which is filed with the secretary of state (central filing) of the state of the debtor’s location.
Here, because Ion has a purchase-money security interest, Ion’s interest would have priority over Bank’s mortgage, but only if Ion made a proper fixture filing. In this case, Ion filed a central filing rather than a local filing and thus did not make a proper fixture filing, so the Bank’s has a superior claim on the equipment.
[Editor’s note: A construction mortgage (i.e., a mortgage that secures an obligation incurred for the construction of an improvement on land, including the cost of acquiring the land, and that indicates it is a construction mortgage in the real property records) has priority over a subsequent security interest in a fixture, including a PMSI in a fixture. The construction mortgage must be recorded before the goods become fixtures, and it covers only goods that become fixtures before completion of the construction. Here, Bank failed to identify its mortgage as a construction mortgage in its filing with the county real estate records office. Consequently, Bank’s mortgage does not qualify for priority under this special rule.]
Interest in Other PTT Assets
At issue is whether having a security interest in equipment also results in a security interest in the debtor’s right to be paid by a lessee who leased the equipment.
A secured party that has a security interest in collateral also has a security interest in any identifiable proceeds of the collateral, including whatever is acquired upon the lease of collateral. A lease of specific goods plus a related monetary obligation constitute chattel paper.
Here, PTT’s rights under the lease with Oncology are proceeds of the PT equipment in which Ion has a security interest. As a result, Ion has a security interest in PTT’s rights against Oncology under the lease. PTT’s rights under the lease with Oncology constitute chattel paper because the lease evidences both a monetary obligation and a lease of specific goods. Consequently, Ion’s security interest in these proceeds is a security interest in chattel paper.
A security interest in proceeds of collateral is perfected for at least 20 days if the security interest in the original collateral was perfected, and remains perfected thereafter if it was perfected by a filing in the same office in which a security interest in the proceeds could be perfected by filing.
Here, Ion’s security interest in the PT equipment was perfected by filing the financing statement and thus Ion’s interest and the rights under the lease are perfected for at least 20 days after filing. A security interest in chattel paper may be perfected by filing a financing statement in the Secretary of State’s office in State A, the same office in which Ion filed the financing statement with respect to the equipment. Thus, the security interest in the chattel paper (the proceeds) is perfected beyond the 20-day period.
At issue is whether Bank has an enforceable security interest in the property described in the loan and security agreements, the inventory and accounts.
A security interest that is enforceable against the debtor with respect to the collateral is said to have attached to the collateral. To be enforceable against the debtor, three conditions must coexist: (i) value has been given by the secured party; (ii) the debtor has rights in the collateral; and (iii) the debtor has authenticated a security agreement that describes the collateral, or the secured party has possession or control of the collateral pursuant to a security agreement.
Here, all three criteria have been met. The loan from Bank to Acme satisfies the value requirement; Acme has rights in its inventory and accounts; and Acme has signed (authenticated) a security agreement that describes the collateral as inventory and accounts. Accordingly, Bank has an enforceable security interest in Acme’s inventory and accounts.
Whether Bank has rights in the following items as collateral depends on whether they are categorized as accounts, inventory, or equipment.
Acme’s rights to payment from customers for repair services obtained on credit
“Accounts” include the right to payment for goods sold, property licensed, or services rendered. Because Bank has an enforceable security interest in Acme’s accounts, the rights to payment are subject to Bank’s security interest.
(b) Used violins for sale in Acme’s store (5%)
“Inventory” includes goods, other than farm products, that are held for sale or lease. Accordingly, the used violins held for sale are inventory subject to Bank’s interest.
(c) Violins in Acme’s possession (10%)
The violins in Acme’s possession that are being repaired for their owners are neither inventory nor accounts and so they are not subject to Bank’s security interest. As noted above, “inventory” includes goods held for sale or lease, but these violins are being held for repair. Also, because the violins are not owned by Acme, but rather by owners who brought them to Acme for repair, Acme has no rights to them and so cannot meet all the conditions necessary for a security interest to be enforceable.
(d) Wood used in repairing violins (5%)
“Inventor y” includes not only goods, other than farm products, that are held for sale or lease, but also raw materials, works in process, or materials used or consumed in a business. Thus, the stock of wood Acme uses in repairing the violins would be classified as inventory and would be subject to Bank’s security interest.
(e) Gambretti plane (5%)
The Gambretti plane is neither held for sale or lease nor classified under any other types of categories of inventory. It would more appropriately fall into the catchall “equipment” class of goods, which includes goods or machinery used in the business. As equipment, the plane would not be subject to Bank’s security interest.
(f) Red Rosa violin (25%)
A buyer in the ordinary course of business (BOCB) takes free of a security interest created by the seller. A BOCB is one who buys goods in the ordinary course of business from a merchant who is in the business of selling goods of that kind in good faith and without actual knowledge that the sale violates the rights of another in the same goods. Here, Bank had a security interest in the Red Rosa violin when Acme held it for sale or lease, at which time it would have been classified as inventory. The violinist bought the violin in the ordinary course of Acme’s business, in good faith, and without knowledge that the sale violated Bank’s rights in inventory. The violinist did not know the terms of Acme’s agreement with Bank. Accordingly, because the purchaser would likely be considered a BOCB, he would take the Red Rosa violin free of the security interest.
Priority of judicial lien creditor
At issue is whether Bank’s perfected security interest would be superior to the rights of a subsequent judicial lien creditor.
A judicial lien creditor is a creditor who acquires a lien on the collateral by a judicial process, rather than by operation of law. A judicial lien creditor takes the property subject to a perfected security interest but generally has priority over an unperfected security interest. A security interest is perfected upon attachment of that interest and compliance with one of the methods of perfection. As noted above, the Bank’s security interest had attached.
A secured party can perfect a security interest by: (i) filing a financing statement; (ii) taking possession of the collateral; (iii) exerting control over the collateral; or (iv) automatic perfection. Bank’s filing of the properly completed financing statement in the appropriate state filing office satisfies the requirements for perfection. Thus, the judicial lien creditor would take the property subject to Bank’s perfected security interest and Bank’s security interest would be superior to the rights of the lien creditor.
The issue is whether a creditor with a perfected security interest has priority over a consumer who purchased inventory in the ordinary course of business.
a. Bank’s interest
Under Article 9, for a security interest to be enforceable against a debtor, the interest must attach to the collateral. For attachment, three conditions must be met: (i) value must be given by the secured party; (ii) the debtor had rights in the collateral; and (iii) the debtor authenticated a security agreement that describes the collateral (or the secured party has possession or control of the collateral pursuant to a security agreement). Here, Bank’s interest attached on March 1 because Bank loaned $100,000 to Recycled, Recycled had rights in the bicycle as inventory, and Recycled authenticated a security agreement for all present and future inventory.
While attachment gives a secured party rights against a debtor, in order to have priority over a third party, perfection of its security interest is necessary. Here, Bank perfected its security interest in Recycled’s inventory by properly filing a financing statement on March 5.
b. Consumer’s interest
A buyer of collateral subject to a perfected security interest generally takes the collateral subject to that interest, unless the secured party has authorized its sale free of the security interest. However, a buyer in the ordinary course of business (BOCB) takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence. A BOCB is a person who (i) buys goods, (ii) in the ordinary course of business, (iii) from a merchant who is in the business of selling goods of that kind, (iv) in good faith, and (v) without knowledge that the sale violates the rights of another in the same goods. Here, Consumer purchased the bicycle from Recycled (a business that sells bicycles and bicycle equipment), the parties conducted the transaction in good faith, and there are no facts to indicate Consumer was aware that the sale was in violation of Bank’s rights. Therefore, Consumer is a BOCB and takes the bike free of Bank’s perfected security interest.
[Editor’s Note: Many students, noting that the facts are silent regarding whether the Bank identified itself as the secured party in the financing statement, conclude that the financing statement did not perfect Bank’s claim. However, the bar examiners assumed that the Bank properly identified itself in the statement it filed and did not discuss the issue in their guidelines for this question. Their analysis suggests that when the facts are silent on whether the secured party’s name is included in the financing statement, you might gain points for noting that the absence of the secured party’s name would prevent perfection, but you should then proceed assuming that the name was included unless additional facts suggest otherwise (e.g., another creditor claims the interest is not perfected because of the missing name).]
Inventory includes goods that are held for sale or lease
Equipment, a catchall class, consists of goods that are not consumer goods, farm products, or inventory (typically goods that are used primarily in a business). Here, Bank’s security interest attached to Recycled’s inventory. However, the computer was not held for sale or lease by Recycled, but was rather being used in its business. Therefore, it would be classified as equipment and not inventory.
Nevertheless, a security interest in collateral automatically attaches to identifiable proceeds. Proceeds include that which is acquired upon the sale, exchange, or other disposition of collateral. Here, the computer was acquired in exchange for a bike (an item of inventory), and is therefore deemed identifiable proceeds of the exchange. Accordingly, Bank’s security interest in the collateral automatically attached to the used computer.
If the security interest in the original collateral is perfected, then a security interest in proceeds is temporarily perfected for 20 days from the time it attaches. Here, Bank’s security interest in the used computer as proceeds was automatically perfected for 20 days after it was acquired on March 15. Under the same office rule, a perfected security interest in proceeds may continue indefinitely when: (i) the filed financing statement covers the original collateral, (ii) the proceeds are collateral in which a security interest may be perfected by filing in the same office as the financing statement, and (iii) the proceeds are not acquired with cash proceeds.
First, Bank’s financing statement covered the bicycle as part of Recycled’s inventory. Second, the financing statement for the used computer, which is equipment, would be filed in the same office as the financing statement for the bicycle. Third, Recycled has not received cash proceeds, but instead acquired the computer in exchange for a bicycle. Thus, Bank’s security interest in the used computer remained perfected when Utility’s judgment lien attached to the computer on April 29.
A judicial lien creditor takes the property subject to a perfected security interest, but generally has priority over an unperfected security interest. Because Bank had a perfected security interest in the used computer when Utility’s judgment lien attached on April 29, Bank’s interest is superior to Utility’s judgment lien.
- Interests in the helmets (33%)
As stated above, perfection of a security interest is generally necessary in order for the secured party to have rights in the collateral that are superior to those rights claimed by third parties. A perfected security interest has priority over an unperfected security interest. A judicial lien creditor takes the property subject to a perfected security interest but generally has priority over an unperfected security interest.
In this case, Bank has a perfected security interest in the helmets as part of Recycled’s inventory. In addition, Utility’s judgment lien that attached to all of Recycled’s personal property, including the helmets. Thus, priority in the helmets depends on Manufacturer’s status as a secured party.
UCC Article 9 applies if the substance of a transaction creates a security interest. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer is limited in effect to a reservation of a security interest. Here, Manufacturer sold the helmets to Recycled on credit and retained title to the helmets. Consequently, though the parties did not call their agreement a security agreement, the substance of their transaction is to secure Recycled’s payment for the helmets, and the transaction is thus governed by Art. 9.
As stated above, a security interest must attach to the collateral to be enforceable. Here, Manufacturer’s interest attached because it gave value by selling the helmets on credit, Recycled had rights in the helmets, and Recycled authenticated a security agreement (in substance) that described the collateral.
Moreover, Manufacturer has a special kind of security interest called a purchase money security interest (PMSI). A PMSI arises when a creditor sells goods to a debtor on credit and retains a security interest in those goods, or the creditor advances funds, which are then used to purchase the goods and the creditor reserves a security interest in those goods. Here, Manufacturer has a PMSI in the helmets because it sold the helmets on credit and retained a security interest in them. Thus, Manufacturer has a PMSI in the helmets.
While, generally, a PMSI has priority over other security interests in the same goods, a PMSI in inventory has priority only if: (i) the PMSI is perfected by the time the debtor receives possession of the collateral; and (ii) the purchase-money secured party sends an authenticated notification of the PMSI to the holder of any conflicting security interest before the debtor receives possession of the collateral. Here, Manufacture did not file a financing statement, nor did it send an authenticated notification of the PMSI to conflicting interest holders. Accordingly, Manufacturer’s security interest is not perfected.
Therefore, Bank’s perfected security interest in inventory has priority over Manufacturer’s unperfected PMSI in the helmets. As a judicial lien creditor, Utility also has priority over Manufacturer’s unperfected security interest, but takes subject to Bank’s perfected security interest.
Claims to business’s equipment
a. Perfected security interest (35%)
A security interest is only enforceable against the debtor if it has attached to the collateral. In order to attach, three conditions must coexist: (i) value has been given by the secured party, (ii) the debtor has rights in the collateral, and (iii) the debtor has authenticated a security agreement that describes the collateral, or the secured party has possession or control of the collateral pursuant to a security agreement. In this case, both the bank and the financing company have secured interests in the business’s equipment. Both gave value in the form of a $100,000 loan, the business had rights in its own equipment, and the business owner authenticated security agreements that describe the collateral by signing the agreements.
Perfection of a security interest is generally necessary for the secured party to have rights in the collateral that are superior to any rights claimed by third parties. A security interest is perfected upon attachment of that interest and compliance with one of the methods of perfection. A security interest in any collateral, except a deposit account, money, or letter-of-credit rights that are not a supporting obligation, may be perfected by filing a financing statement. The financing statement must contain the debtor’s name, the name of the secured party, and the collateral covered by the financing statement. Typically, a security interest attaches and is then perfected. But, if the necessary steps for perfection are taken prior to attachment, then the security interest is perfected upon attachment. In this case, both the bank and the financing company have perfected security interests because they both filed financing statements containing the name of the business, their own name, and the “equipment” as collateral.
