Secured Transactions - Priority Flashcards
Who is an Attached Unperfected Creditor (AUPie)?
An Article 9 Creditor who creates an enforceable security (attaches), but either doesn’t perfect or fails to perfect properly.
Who is a Lien Creditor (LC)?
General unsecured creditor who goes to court to get a judicial lien on the collateral.
Who is a Perfect Attached Creditor?
Article 9 creditor who succeeds in attaining perfection.
Who is a Non-Ordinary Course Buyer (NOCie)?
Someone who purchases the collateral outside the ordinary stream of commerce.
Who is a Buyer in Ordinary Course (Buyer in Ordinary Course)?
This is someone who purchases the collateral from a merchant’s inventory.
Who is a General Unsecured Creditor?
This is a lender who never bothered to take collateral.
What is the general ranking of creditors [highest priority to lowest]?
(1) Buyer in the Ordinary Course
(2) Perfect Attached Creditor
(3) Lien Creditor
(4) Non-Ordinary Course Buyer
(5) Attached Unperfected Creditor (AUPie)
(6) General Unsecured Creditor
Who does an attached unperfected creditor defeat?
(1) Debtor
(2) Any subsequent AUPie and
(3) General Unsecured Creditor (GUC)
Lose to Perfected Attached Creditor, Lien Creditor, and any buyer without knowledge of the security interest.
Who does a Perfected Attached Creditor defeat?
All except
(1) PAC who filed first [first in time, first in right]
(2) Certain Purchase Money Security Interest (PMSI) Holders
(3) Buyer in the Ordinary Course
Who is an after acquired collateral fianancier?
A secured creditor who takes as a collateral a security interest “in all of the Debtor’s [equipment, inventory] where now held or hereafter acquired].
AACF vs. PMSI-holder over collateral in equipment?
If the collateral is equipment, the PMSI-holder must file properly within 20 days after debtor takes possession of the property.
AACF vs. PMSI-Holder when the collateral is inventory?
(1) PMSI-Holder must file properly before debtor takes possession.
(2) PMSI-Holder must notify AACF before debtor takes possession.
Rationale: Prevent debtor fraud.
