Fact Pattern 30-1B (Questions B15-B16 apply)
Resource Drilling Company buys equipment for use in its operations, borrow?ing $1 million from Security Finance Corporation for a security in?terest in the equipment. The next day, Resource Drilling borrows $500,000 from Touchstone Loans, also for a security interest in the equipment. Resource Drilling defaults on both loans.
-Refer to Fact Pattern 30-1B. Suppose that two weeks after Resource Drilling takes possession of the equipment, Security Finance and Touchstone Loans file financing statements, with Touchstone Loans fil?ing first. In that cir?cum?stance, the party with priority to the equipment is
A) Resource Drilling.
B) Security Finance and Touchstone Loans proportionately.
C) Security Finance only.
D) Touchstone Loans only.

Question

Quizplus · Accepted Answer

Touchstone Loans would have priority because they filed their financing statement first, giving them priority over Security Finance. Therefore, Touchstone Loans would have priority over the equipment and would be able to take possession of it in the event of default by Resource Drilling.

Fact Pattern 30-1B (Questions B15-B16 Apply)