Priorities Flashcards
(10 cards)
General Creditor (Unsecured)
A general creditor is one who has a claim, including a judgment, but who has no lien or security interest regarding the particular collateral.
Judicial Lien Creditor
A judicial lien creditor is a creditor who acquires a lien on the collateral by a judicial process, rather than by operation of law.
Transferees
Transferees of the collateral are persons who obtain full title to the goods as a result of a transfer of the collateral from the debtor.
Buyers in the Ordinary Course of Business (BOCB)
A BOCB is a person who:
Buys goods (other than farm products);
In the ordinary course;
From a seller who is in the business of selling goods of that kind;
In good faith; and
Without knowledge that the sale violates the rights of another in the same goods.
Consumer Buyer
A consumer buyer is a person who:
Buys consumer goods for value;
For her own personal, family, or household use;
From a consumer seller; and
Without knowledge of the security interest.
Perfected v. Perfected
When there are two or more secured parties with perfected security interests in the same collateral, the first to file or perfect its security interest has priority.
PMSI in Goods Other than Inventory or Livestock
A PMSI in goods—other than inventory or livestock—prevails over all other security interests in the collateral, even if they were previously perfected, if the security interest is perfected:
i) When the debtor receives possession of the collateral; or
ii) Within 20 days thereafter
PMSI v. PMSI
If there are two or more competing PMSIs, then the first to file or perfect has priority.
Fixture Filing
A fixture filing is the filing of a financing statement covering goods that are or will become fixtures.
Construction Mortgage
A construction mortgage is a mortgage that secures an obligation incurred for the construction of an improvement on land, including the cost of acquiring the land, and that indicates it is a construction mortgage in the real property records.
