Everett Buys a New Bicycle on Credit from Bicycle City

Essay

Everett buys a new bicycle on credit from Bicycle City. Bicycle City has a security agreement for a purchase-money security interest in the bicycle but did not file a financing statement. Everett, however, discovers that he does not have enough money to pay his rent. Therefore, he sells his bicycle to his neighbor, Helen, who is unaware of Bicycle City's security interest in the bicycle. Everett fails to make payments on the bicycle and Bicycle City seeks to repossess it. Discuss the rights and obligations of the parties.