Secured Transactions: Priorities

Question 1

General rule

Answer 1

first in time is first in right

Question 2

Whem might second in time, first in right apply

Answer 2

a perfected PMSI in goods will prevail over a conflicting security interest if the PMSI is perfected when the debtor receives possession of the collateral or within 20 days thereafter.

Question 3

Secured party vs lien creditor

Answer 3

a secured party will have priority over a lien creditor if the secured party (1) perfects before the lien creditor’s interest arises, OR (2) files a financing statement and evidences a security agreement before the lien creditor’s interest arises

Question 4

Buyers vs secured parties

Answer 4

A secured interest generally survives the sale of the collateral. however, a security interest will not impact buyer (1) in the ordinary course of business (2) of consumer goods, (3) of chattel paper, (4) who takes deliver.

Question 5

BITOCOB

Answer 5

A buyer in the ordinary course of business is a person who buys goods in good faith, without knowledge that the sale violates the rights of another person, and buys in the ordinary course from a typical seller

Question 6

General remedies of secured party

Answer 6

upon default of the debtor, the secured party may sell or otherwise dispose of any or all of the collateral, so long as it is commercially reasonable.