A perfected purchase money security interest in inventory is likely to have priority over a conflicting security interest in the same inventory if the:
A) purchase money security interest is perfected three months after the debtor receives possession of the inventory.
B) purchase money secured party gives an oral notification to the prior secured creditor before the debtor receives the inventory.
C) holder of the competing security interest received notification within eight years before the debtor receives the inventory.
D) notification states that the person expects to acquire a purchase money security interest in inventory of the debtor and describes the inventory.

Question

Quizplus · Accepted Answer

A perfected purchase money security interest in inventory has priority over a conflicting security interest in the same inventory if all four of these requirements are met: (1) the purchase money security interest is perfected at the time the debtor receives possession of the inventory, (2) the purchase money secured party gives notification in writing to the prior secured creditor before the debtor receives the inventory, (3) the holder of the competing security interest received notification within five years before the debtor receives the inventory, and (4) the notification states that the person expects to acquire a purchase money security interest in inventory of the debtor and describes the inventory.

A Perfected Purchase Money Security Interest in Inventory Is Likely