Exam 23: Security Interests in Personal Property

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

Fact Pattern 20-1 General Leasing Company (GLC) buys equipment for use as inventory, borrow?ing $1 million from Helpful Finance Corporation for a security in?terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 20-1. Suppose that Helpful perfects its se?curity in?ter?est when GLC takes possession of the equipment. In that cir?cum?stance, the party with pri?ority to the collateral on GLC's default would be

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

Fiona borrows $1,000 from Garden State Bank, using her motorcycle as col?lateral. To perfect its security in?terest, the bank must file its financing statement with

The last security interest to be perfected is the first in priority over any other perfected security interests.

Jane is the secured party in a secured transaction with Margaret. Jane could also be referred to as the

A security interest cannot be perfected without the filing of a financing statement.

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

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

In most situations, a termination statement must be filed or sent within twenty days after the debt is paid.

The payment of Jose's debt to Klint is guaranteed by Jose's personal property. The process by which Klint can protect himself against the claims of third parties to this property is

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

Perfection refers to the quality of the collateral that secures a creditor's interest in a debtor's debt.

A security agreements may provide for coverage of after-acquired property.

Fact Pattern 20-1 General Leasing Company (GLC) buys equipment for use as inventory, borrow?ing $1 million from Helpful Finance Corporation for a security in?terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 20-1. Suppose that two weeks after GLC takes pos?session of the equipment, Helpful and Interstate file financing state?ments, with Interstate fil?ing first. In that cir?cum?stance, the party with priority to the equipment is

The person who owes the payment of a secured obligation is the secured party.

On default, unless the security agreement states otherwise, the secured party has the right to take possession of the collateral.

A financing statement must include the creditor's signature.

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

Proceeds from the disposition of collateral after default on the underlying debt are distributed equally among lienholders who have made demands.