Asked by Mario Golden on Jul 28, 2024
Verified
Thomas and Pauline are two secured parties. Neither party has perfected their interests. Assuming a purchase-money security interest is not involved, who would prevail in a dispute?
A) The party who attached its interest first will prevail.
B) The party who loaned money first will prevail.
C) Thomas and Pauline will divide the proceeds from the sale of the collateral evenly between them.
D) The party who loaned the most money on the collateral has priority.
E) The party who first notified the debtor of a missed payment has priority.
Purchase-Money Security Interest
A legal claim or lien on collateral that secures payment of the price of goods bought.
Secured Interests
legal claims or liens on collateral property or assets that secure the repayment of a debt or obligation.
- Learn the criteria for establishing seniority in disputes involving numerous secured parties.
Verified Answer
MB
Mariaesther BritoJul 29, 2024
Final Answer :
A
Explanation :
In the absence of perfection, priority between competing security interests generally goes to the party who attached its interest first. Attachment is the process by which a security interest becomes enforceable against the debtor with respect to the collateral.
Learning Objectives
- Learn the criteria for establishing seniority in disputes involving numerous secured parties.