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Secured Transactions Assignment 32

Secured Transactions Assignment 32. Secured Creditors against Secured Creditors. The Priority Rules. The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?. The Priority Rules.

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Secured Transactions Assignment 32

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  1. Secured TransactionsAssignment 32 Secured Creditors against Secured Creditors

  2. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  3. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  4. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  5. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  6. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  7. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  8. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  9. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  10. The Priority Rules The system of priority is basically “first in time, first in right.” Question: Precisely what must a creditor do first to be first?

  11. Priority Rule: PMSI versus Lien Creditor, §9-317(e) Filing PMSI Lien creditor 9-317(e). If a person files a financing statement with respect to a purchase-money security interest

  12. Priority Rule: PMSI versus Lien Creditor, §9-317(e) 20 day grace Delivery Filing PMSI Lien creditor 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery

  13. Priority Rule: PMSI versus Lien Creditor, §9-317(e) 20 day grace Delivery Filing PMSI Lien creditor Lien creditor 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery . . . the security interest takes priority over the rights of a . . . lien creditor

  14. Priority Rule: PMSI versus Lien Creditor, §9-317(e) 20 day grace Delivery Attachment Filing PMSI Lien creditor Lien creditor 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery . . . the security interest takes priority over the rights of a . . . lien creditor which arise between the time the security interest attaches and the time of filing.

  15. Priority Rule: PMSI versusSecurity Interest, §9-324(a) 20 day grace Possession Filing PMSI SI §9-324(a).A perfected purchase-money security interest in goods . . . has priority over a conflicting security interest in the same goods . . .if the purchase money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter.

  16. Priority Rule: PMSI versusSecurity Interest, §9-324(a) 20 day grace Possession Filing PMSI SI Filing §9-324(a). A perfected purchase-money security interest in goods . . . has priority over a conflicting security interest in the same goods . . . if the purchase money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter.

  17. Possession Filing 20 day grace PMSI SI §9-324(a). A perfected purchase-money security interest in goods . . . has priority over a conflicting security interest in the same goods . . . if the purchase money security interest is perfected when the debtor receives possession . . . or within 20 days thereafter. 20 day grace Delivery Filing PMSI Lien creditor 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery . . . the security interest takes priority over the rights of a . . . lien creditor which arise between the time the security interest attaches and the time of filing.

  18. Possession Filing 20 day grace PMSI SI §9-324(a). A perfected purchase-money security interest in goods . . . has priority over a conflicting security interest in the same goods . . . if the purchase money security interest is perfected when the debtor receives possession . . . or within 20 days thereafter. 20 day grace Delivery Filing PMSI Lien creditor 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery . . . the security interest takes priority over the rights of a . . . lien creditor which arise between the time the security interest attaches and the time of filing.

  19. Possession Filing 20 day grace PMSI SI Filing §9-324(a). A perfected purchase-money security interest in goods . . . has priority over a conflicting security interest in the same goods . . . if the purchase money security interest is perfected when the debtor receives possession . . . or within 20 days thereafter. 20 day grace Delivery Attachment Filing PMSI Lien creditor Levy 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery . . . the security interest takes priority over the rights of a . . . lien creditor which arise between the time the security interest attaches and the time of filing.

  20. Possession Filing 20 day grace PMSI SI Filing §9-324(a). A perfected purchase-money security interest in goods . . . has priority over a conflicting security interest in the same goods . . . if the purchase money security interest is perfected when the debtor receives possession . . . or within 20 days thereafter. 20 day grace Delivery Attachment Filing PMSI Lien creditor Levy Levy 9-317(e). If a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery . . . the security interest takes priority over the rights of a . . . lien creditor which arise between the time the security interest attaches and the time of filing.

  21. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) Secured 1 SA and FS 2009 covers Debtor’s “equipment” Debtor

  22. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) Secured 1 SA and FS 2009 covers Debtor’s “equipment” Debtor Reservation of priority against other lenders against the collateral.

  23. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor Reservation of priority against other lenders against the collateral.

  24. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor Sale (unauthorized) Reservation of priority against other lenders against the collateral.

  25. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor Sale (unauthorized) Reservation of priority against other lenders against the collateral.

  26. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor Sale (unauthorized) §9-322(a)(1). Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest . . . is first perfected . . .

  27. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor Sale (unauthorized) §9-322(a)(1). Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest . . . is first perfected . . . Secured 1 appears to win!

  28. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor §9-322(a)(1). Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest . . . is first perfected . . . Secured 1 appears to win! But if Secured 1 wins, Secured 2 won’t lend. Unauthorized sale would take Secured 1’s priority.

  29. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) SA and FS 2012 covers Another’s “equipment” Secured 2 Secured 1 SA and FS 2009 covers Debtor’s “equipment” Another Debtor Sale (unauthorized) • §9-325(a). [Notwithstanding § 9-322(a) and 9-324] a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if: • The debtor acquired the collateral subject to the security interest created by the other person; • The security interest created by the other person was perfected when the debtor acquired the collateral . . .

  30. Problem 32.1, page 531 Bank1 files Aug 1

  31. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends Aug 1 Aug 5

  32. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Aug 1 Aug 5 Aug 7

  33. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10

  34. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins?

  35. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1).

  36. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins?

  37. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins? Bank2, perfected before C-Dogs levied. §9-317(a)(2).

  38. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins? Bank2, perfected before C-Dogs levied. §9-317(a)(2). C-Dogs versus Bank1. Who wins?

  39. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins? Bank2, perfected before C-Dogs levied. §9-317(a)(2). C-Dogs versus Bank1. Who wins? C-Dogs, levied before Bank 1 perfected or filed and complied with §9-203(b)(3). Who is first?

  40. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins? Bank2, perfected before C-Dogs levied. §9-317(a)(2). C-Dogs versus Bank1. Who wins? C-Dogs, levied before Bank 1 perfected or filed and complied with §9-203(b)(3). Who is first?

  41. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins? Bank2, perfected before C-Dogs levied. §9-317(a)(2). C-Dogs versus Bank1. Who wins? C-Dogs, levied before Bank 1 perfected or filed and complied with §9-203(b)(3). Who is first? “Circularity of liens.” Bank2 Bank1 C-Dogs

  42. Problem 32.1, page 531 Bank1 files Bank2 files SA, lends C-Dogs Levies Bank1 SA, lends Aug 1 Aug 5 Aug 7 Aug 10 Bank1 versus Bank2. Who wins? Bank1, filed before Bank2 filed or perfected. §9-322(a)(1). Bank2 versus C-Dogs. Who wins? Bank2, perfected before C-Dogs levied. §9-317(a)(2). C-Dogs versus Bank1. Who wins? C-Dogs, levied before Bank 1 perfected or filed and complied with §9-203(b)(3). Who is first? “Circularity of liens.” Key: Bank1 has two priority dates Bank2 Bank1 C-Dogs

  43. Problem 32.2, page 531 Centurion lends to Airco, perfects Mar 21 Centurion lends to Airco, perfects in flight simulation equipment, including after acquired.

  44. Problem 32.2, page 531 Centurion lends to Airco, perfects FirstBank lends to FlightCo, perfects Mar 21 Jul 21 Centurion lends to Airco, perfects in flight simulation equipment, including after acquired. Firstbank lends to FlightCo, perfects in flight simulation equipment, including after acquired.

  45. Problem 32.2, page 531 FlightCo sells MD-80 to Airco Centurion lends to Airco, perfects FirstBank lends to FlightCo, perfects Mar 21 Jul 21 Nov 4 Centurion lends to Airco, perfects in flight simulation equipment, including after acquired. Firstbank lends to FlightCo, perfects in flight simulation equipment, including after acquired. FlightCo sells MD-80 flight simulation equipment to Centurion in an unauthorized sale.

  46. Problem 32.2, page 531 FlightCo sells MD-80 to Airco Centurion lends to Airco, perfects FirstBank lends to FlightCo, perfects Mar 21 Jul 21 Nov 4 Centurion lends to Airco, perfects in flight simulation equipment, including after acquired. Firstbank lends to FlightCo, perfects in flight simulation equipment, including after acquired. FlightCo sells MD-80 flight simulation equipment to Centurion in an unauthorized sale. a. Who is first in the MD-80 flight simulation equipment?

  47. Problem 32.2, page 531 FlightCo sells MD-80 to Airco Centurion lends to Airco, perfects FirstBank lends to FlightCo, perfects Mar 21 Jul 21 Nov 4 Centurion lends to Airco, perfects in flight simulation equipment, including after acquired. Firstbank lends to FlightCo, perfects in flight simulation equipment, including after acquired. FlightCo sells MD-80 flight simulation equipment to Centurion in an unauthorized sale. a. Who is first in the MD-80 flight simulation equipment?Firstbank, §9-325

  48. Priority Rule: Transferor SI versus Transferee SI, §9-325(a) First Bank Centurion FlightCo Airco Sale (unauthorized) • §9-325(a). [Notwithstanding § 9-322(a)] a security interest created by [Airco] is subordinate to a security interest in the same collateral created by [FlightCo] if: • [Airco] acquired the collateral subject to the security interest created by [FlightCo]; • The security interest created by [FlightCo] was perfected when [Airco] acquired the collateral . . .

  49. Problem 32.2, page 531 FlightCo sells MD-80 to Airco Centurion lends to Airco, perfects FirstBank lends to FlightCo, perfects Mar 21 Jul 21 Nov 4 b. Airco paid FlightCo $750K. FlightCo deposited to Centurion.

  50. Problem 32.2, page 531 FlightCo sells MD-80 to Airco Centurion lends to Airco, perfects FirstBank lends to FlightCo, perfects Mar 21 Jul 21 Nov 4 b. Airco paid FlightCo $750K. FlightCo deposited to Centurion. Does Centurion have a security interest in FlightCo’s Centurion account?

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