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16 Cards in this Set
- Front
- Back
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What are the SIX types of creditors?
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1. BIOC - Buyer in ordinary course
2. PAC - Perfected attached creditor 3. LC - Lien creditor 4. NOCie - Non-Ordinary course buyer 5. AUPie - Attached Unperfected Creditor 6. GUC - General Unsecured Creditor |
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What is a Buyer in Ordinary Course (BOIC)?
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- This is someone who purchases the collateral
from a merchant's inventory. - For example, Steven Tyler buys a guitar from Sam Ash Guitar Store. |
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What is a Perfected Attached Creditor (PAC)?
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This is the Article 9 creditor who succeeds in
attaining perfection. |
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What is a Lien Creditor?
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This is the general unsecured creditor who goes to court to get
a judicial lien on the collateral. |
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What is a Non-Ordinary Course Buyer (NOCie)?
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- This is someone who purchases the collateral outside the ordinary stream of commerce.
- For example, Steven Tyler buys a guitar from his auto mechanic. |
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What is an Attached Unperfected Creditor (AUPie)?
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This is the Article 9 creditor who creates an enforceable security interest, i.e., it attaches, but either never bothers to perfect or tries to perfect but botches the effort, perhaps by filing in the wrong place.
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What is a General Unsecured Creditor (GUC)?
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- This is the lender who never bothered to take
collateral. - Supreme loser |
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What is the general order of priority?
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1. BIOC - Buyer in ordinary course
2. PAC - Perfected attached creditor 3. LC - Lien creditor 4. NOCie - Non-Ordinary course buyer 5. AUPie - Attached Unperfected Creditor 6. GUC - General Unsecured Creditor |
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Who are the only THREE people that can defeat a Perfected Attached Creditor's interest in collateral?
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1. A Perfected attached creditor who filed first
2. PMSI holders 3. Buyers in Ordinary Course (BIOC) |
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When will priority relate back before attachment?
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- If the creditor files before the attachment (e.g. during negotiations) then as long as there is later attachment the priority will relate back to the early filing date
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What is a Purchase Money Security interest PMSI holder?
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- Someone who takes a security interest that enables the debtor to purchase the goods.
- Could be the seller of the good or a 3rd party bank |
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When will a Purchase Money Security Interest (PMSI) conflict with a Perfected Attached Creditor?
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- When the PAC is am After Acquired Collateral Financier
- Means that the PAC has an acquired collateral clause |
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What are the two ways an AAFC and a PMSI holder's interest can collide?
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1. When the collateral is equipment
2. When the collateral is Inventory |
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When will a PMSI have higher priority than an AAFC if the collateral is equipment? (2)
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PMSI holder must
1. File properly 2. Within 20 days of the debtor taking possession of the collateral |
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When will a PMSI have higher priority than an AAFC if the collateral is inventory? (2)
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PMSI holder must
1. File property BEFORE debtor takes possession; AND 2. Notify the AAFC BEFORE debtor takes possession |
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Who has higher priority when a Buyer in Ordinary Course (BIOC) purchases after a PAC?
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- Buyer wins.
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