Exam 30: Secured Transactions

On a debtor's default, he perfection of a security interest will not always protect a secured party against other third parties having claims to the collateral.

A financing statement is an agreement that creates or provides for a security interest.

Sally is the secured party in a transaction with Lilly, who is the debtor. Sally files a financing statement with the appropriate state official. The financing statement must contain

Attachment gives the debtor a defense against a creditor's attempt to enforce a security interest in the debtor's collateral.

Khalil holds a security interest in inventory owned by Luc. Khalil pro?tects his claim to the inventory in the event of Luc's default by

The payment of Fritz's debt to Gianini is guaranteed by Fritz's personal property. Gianini is

Fact Pattern 30-1B (Questions B15-B16 apply) Resource Drilling Company buys equipment for use in its operations, borrow?ing $1 million from Security Finance Corporation for a security in?terest in the equipment. The next day, Resource Drilling borrows $500,000 from Touchstone Loans, also for a security interest in the equipment. Resource Drilling defaults on both loans. -Refer to Fact Pattern 30-1B. Suppose that two weeks after Resource Drilling takes possession of the equipment, Security Finance and Touchstone Loans file financing statements, with Touchstone Loans fil?ing first. In that cir?cum?stance, the party with priority to the equipment is

City Bank's financing statement in collateral owned by Delta Waters Corporation will expire in less than a year. Filed timely, a continuation statement could extend the effectiveness of the financing statement for

A security interest can cover property in which the debtor has ownership or possessory rights in the present or in the future.

A security agreement need not be in writing if the collateral is transferred to the secured party.

Kathy is the secured party in a transaction with Julie, who is the debtor. The collateral is a 2007 Chevrolet F150 pick-up truck. Kathy files a financing statement in which she describes the collateral as "a vehicle." To perfect Kathy's interest this is

Corporate Bank wants to perfect its security interest in inventory owned by Outdoor Outfitters, Inc. Most likely, a financing statement should be filed with

Any breach of the terms of the security agreement can constitute default.

Debit & Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by

Lenders Bank files a financing statement regarding a transaction with Metro Construction Company. To be valid, the financing statement must contain all of the following except

Sweetwater Café defaults on debts to Town & Country Bank and Uno Loan Company. Town & Country perfected its security interest before Uno. Town & Country takes possession of the collateral in which it has a security interest. On a sale of the collat?eral, the proceeds will be applied first to

Rural Financial Corporation is a secured party with a security interest in property owned by Strawberry Fields, Inc. Perfection of this security in?ter?est may not protect Rural Financial against the claim of

A security interest is enforceable only if the collateral is in the creditor's possession.

Dredging, Inc., borrows $50,000 from Equity Financing Corporation in a secured transaction using Dredging's equipment as collateral. Dredging then borrows $70,000 from First Choice Lenders, Inc., using the same equipment as collateral. Neither Equity Financing nor First Choice perfects its security interest. Dredging defaults on the loans. The party with priority is

A purchase-money security interest in consumer goods is perfected automatically at the time it is created.