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Exam 29: Secured Transactions

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Question 21

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A purchase-money security interest in a business's inventory is perfected automatically at the time of a credit sale.

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Question 22

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To create an enforceable security interest, the secured party must give the debtor something of value.

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Question 23

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Saf-T Lenders, Inc., takes possession of Tiara's stock in Urgent Care Corporation to perfect Saf-T's security interest in the stock. This is

The payment of Yves's debt to Zane is guaranteed by Yves's personal property. Their agreement describes Yves's subject property by serial number. To establish Zane's interest, this is

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

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

Elias repays his debt, incurred to buy consumer goods, to Finance Bank and immediately files a written request for a termination statement. Finance

Mona lives in New Jersey, but she works in New York. Mona borrows $1,000 from National Bank, using her motorcycle as collateral. To perfect its security interest, the bank must file its financing statement in at least

Efrem owns Fans & Players, a retail sporting goods shop. When Great Hill Lodge, a new ski resort, is built in the area, Efrem decides to expand and borrows a large sum from Hometown Bank. The bank takes a security interest in Efrem's present inventory and any after-acquired inventory as collateral for the loan. The bank properly perfects the security interest by filing a financing statement. Efrem's business is profitable, and he begins doubling his inventory. A year later, an avalanche destroys the ski slope and lodge. Efrem's business takes a turn for the worse, and he defaults on his debt to the bank. The bank seeks possession of his entire inventory, even though the inventory is twice as large as it was when the loan was made. Efrem claims that the bank has rights to only half of his inventory. Is Efrem correct Explain.

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

Clear Sky Credit Corporation asks Dimension Games Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is

A financing statement cannot be filed electronically.

The payment of Laine's debt to Mingo is guaranteed by Laine's personal property. The process by which Mingo can protect himself against the claims of third parties to this property is

The payment of Hu's debt to Ian is guaranteed by Hu's personal property. To give public notice of his interest in Hu's property, Ian is most likely to

A continuation statement will continue the effectiveness of a financing statement for five years.

A security agreement must contain a description of the collateral that reasonably identifies it.

A financing statement must be filed under the debtor's trade name.

On the debtor's default, a secured party can take possession of the collateral covered by the security agreement only by court order.

Any creditor who has a security interest in a debtor's collateral is the secured party.

Experienced Capital Company and First Street Bank are secured parties with security interests in property owned by Grande Oil Corporation. Between these security interests, the first to be filed or perfected has priority over other filed or perfected security interests in