PPSA priority question where my registration apparently did not count
Two secured creditors, both registered, and I picked the one who registered first. Key picked the other one and says the first registration was ineffective at the time it was made. How can a registration be ineffective.
7 replies
Because registering is not the step that gets you priority. Three stages and you skipped one.
Attachment. Security agreement, value given, debtor has rights in the collateral. Until those three line up there is no security interest in existence.
Perfection. Attachment plus a perfecting step, usually registration, sometimes possession.
Priority, which as between perfected interests generally follows the order of perfection.
So a registration filed before attachment perfects nothing. Your creditor registered earlier but perfected later, because perfection waited for attachment to happen. Reread the pattern and I would bet it tells you when value was advanced.
it does. money went out three weeks after the registration. so that is what the question was actually about
This runs into the insolvency material too, which I did not expect. Unperfected goes badly for the secured party once a trustee shows up. Learn the two sections apart and you miss a question asking about both.
PMSI is the exception to know cold. Special priority if you take the steps inside the window, and a pattern always tells you when the equipment was delivered for a reason.
drew this as three boxes and two arrows before it stuck. prose was never going to work for me
flowchart in the index or loose?
front of the business tab, taped in. loose pages vanish
Sign in to take part in this discussion. If you have purchased an examination from us, you already have an account.