Exam 29: Secured Transactions

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

Excel Investments, Inc., and First State Bank are secured parties with security interests in property owned by GR8 Manufacturing Corporation. Priority between these security interests is generally determined by

Dag is the secured party in a secured transaction with Elmo. In this transaction, Dag

Expert Capital Company and First National Bank are secured parties with security interests in property owned by Grande 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

Discount Stores, Inc., borrows $5,000 each from EZ Loan Corporation, First National Bank, and Great Products Corporation. Discount uses its "present inventory and any thereafter acquired" to secure the loans from EZ Loan and First National. EZ Loan perfects its interest on April 1, fol?lowed by First National on April 5. Discount buys new inventory on April 10 from Great Products and signs a security agreement, giving Great Products a purchase-money security interest in the new inven?tory. On the same day, Great Products perfects its interest and notifies EZ Loan and First National. Discount takes possession of the new inven?tory on April 15. On April 20, Discount defaults on all of the loans. Whose security interest has priority?

Lyle buys a motorcycle from Moto Cycle Corporation and finances the purchase through National Credit Company (NCC). Lyle defaults on the loan. NCC takes possession of the motorcycle. NCC's notice to Lyle states that $5,000 is required to redeem the vehicle, which will be sold if it is not redeemed before May 15. The actual redemption amount is $4,000, and the sale is held on May 5. On what ground might Lyle file a successful suit against NCC?

Under certain conditions, a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.

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

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

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

Fact Pattern 29-2B General Leasing Company 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 29-2B. 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

Intermittent advances against a line of credit can be subject to the same collateral.

A security agreement must be filed in person to be valid and enforceable.

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

Ron does not make a payment on his car loan for several months. The dealer, Star Auto, repossesses the car by towing it from a public parking lot. Ron sues Star for breach of the peace. Ron will probably

Proceeds consist of whatever is received when collateral is sold.

Rich Financial, Inc., files a financing statement regarding a transaction with Supreme Business Company. To be valid, the financing statement must contain all of the following except

Dependable Credit Corporation asks Electric Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired prop?erty. This is

The payment of Eden's debt to Flem is guaranteed by Eden's personal property. This property is

A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.