Exam 29: Secured Transactions

The state office in which a financing statement should be filed depends on the debtor's location.

A buyer in the ordinary course of business has priority unless a previously perfected security interest exists as to the goods.

When more than one security interest has been perfected in the same collateral,their claims are satisfied proportionately to their value.

Filing a financing statement with the appropriate public office is the only way to per?fect a security interest.

Attachment gives the creditor an enforceable security interest in the collateral.

A purchase-money security interest in a business's inventory is perfected automatically at the time of a credit sale.

A perfected purchase-money security interest in inventory can have priority over a conflicting security interest in the same inventory.

Super Chef Appliance Company allows Reba to take a set of kitchen appli?ances that she bought from Super Chef even though she has not paid the full price.Super Chef's legally sufficient financing statement in the goods need not include

A financing statement must be filed under the debtor's trade name.

The payment of Florida's debt to Guillermo is guaranteed by Florida's personal property.Guillermo is

Bayside Credit Corporation lends funds to Claude,a consumer,to apply to the cost of a boat,which is the collateral for the loan.An enforceable security interest requires

Clear Sky Credit Corporation asks Dimension Games Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired prop?erty.This is

Fact Pattern 29-1A (Questions A11-A13 apply) Luxuro Vehicles,Inc.,makes and sells automobiles to auto dealers,including MotorPros Auto & Truck Sales.MotorPros sells the cars to consumers and businesses. -Refer to Fact Pattern 29-1A.Oakes,a police officer,buys a Luxuro from MotorPros to drive in his off-duty hours.Oakes's Luxuro is

Efrem owns Fans & Players,a retail sporting goods shop.When Great Hill Lodge,a new ski resort,is built in the area,Efrem decides to expand and borrows a large sum from Hometown Bank.The bank takes a secu?rity interest in Efrem's present inventory and any after-acquired inven?tory as collateral for the loan.The bank properly perfects the security in?terest by filing a financing statement.Efrem's business is profitable,and he begins doubling his inventory.A year later,an avalanche destroys the ski slope and lodge.Efrem's business takes a turn for the worse,and he defaults on his debt to the bank.The bank seeks possession of his en?tire inventory,even though the inventory is twice as large as it was when the loan was made.Efrem claims that the bank has rights to only half of his inventory.Is Efrem correct? Explain.

On the debtor's default,a secured party can take possession of the collateral covered by the security agreement only by court order.

A security agreement must contain a description of the collateral that reasonably identifies it.

To create an enforceable security interest,the secured party must give the debtor something of value.

Experienced Capital Company and First Street Bank are secured parties with security interests in property owned by Grande Oil Corpora?tion.Between these security interests,the first to be filed or perfected has prior?ity over other filed or per?fected security interests in

Elias repays his debt,incurred to buy consumer goods,to Finance Bank and immediately files a written request for a termination state?ment.Finance

A financing statement cannot be filed electronically.