Exam 30: Secured Transactions

Lena borrows from Mac and Nicole, using the same collateral for both loans. Only Nicole has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is​

Fiscal Credit Corporation asks Global Industries, Inc., to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is​

When more than one party claims an interest in the same collateral, a perfected secured party's interest has no priority.

On default, a secured party who chooses not to retain the collateral must dispose of it in a commercially reasonable manner.

A purchase-money security interest in consumer goods is created when a person buys the goods on credit.

Article 9 of the Uniform Commercial Code governs secured transactions.

Dave's Hardware store defaults on a debt to Equity Bank, which takes possession of the collateral securing the debt. The bank sells the collateral. The proceeds from the sale are applied first to​

Fact Pattern 30-1 General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1 million from Business Finance Corporation for a security interest in the equipment. The next day, GLC borrows $500,000 from Commercial Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 30-1. Suppose that two weeks after GLC takes possession of the equipment, Business Finance and Commercial Bank file financing statements, with Interstate filing first. In that circumstance, the party with priority to the equipment is​

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

Proceeds are whatever is received when collateral is sold.

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

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

The payment of John's debt to Kirsten is guaranteed by John's personal property. Kirsten is most likely to perfect her interest by​

In most situations, the state office in which a financing statement should be filed depends on the location of the collateral.​

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

AAA Loans, Inc., holds a security interest in kitchen and restaurant equipment owned by Brunch n' Lunch Bistro. AAA assigns its interest in the equipment to Commercial Investments Corporation. Commercial Investments becomes the secured party of record​

Resource Investment Company and MegaBank are secured parties with security interests in property owned by LNG Gas Corporation. Between these security interests, the first to be filed or perfected has priority over other filed or perfected security interests in​

The payment of Chick's debt to Diamond is guaranteed by Chick's collection of eight restored autos. Their agreement describes Chick's subject property by serial number. To establish Diamond's interest, this is​

To create an enforceable security interest, the secured party must give something of value to a debtor's other creditors.

The payment of Linda's debt to Pat is guaranteed by Linda's personal property. Pat is most likely to perfect her interest by​