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#2164960 - 02/16/18 05:17 PM Notification of PMSI - Illinois
countrytink Offline
Junior Member
Joined: Feb 2004
Posts: 48
Illinois
I received a Notification of PMSI from a financer on "inventory" with a broad description; our bank has a 1st lien on all assets so the financer sent the notice to our bank. It is not inventory specific, so can we send them a notice stating we have a priority lien on all assets and request a specific inventory list?

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Article 9
#2164982 - 02/16/18 05:59 PM Re: Notification of PMSI - Illinois countrytink
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Really a question for your attorney. I'm really am not too sure why a separate Article 9 forum was added to be honest. At one time, there was an pretty knowledgeable Article 9 person that posted, but other than that, there aren't to many other posters that can provide much help on this subject.
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#2165002 - 02/16/18 06:31 PM Re: Notification of PMSI - Illinois rlcarey
countrytink Offline
Junior Member
Joined: Feb 2004
Posts: 48
Illinois
Thanks - I was hoping someone else might have run into this situation. I've had this happen with equipment, but not on inventory.

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#2165071 - 02/16/18 09:10 PM Re: Notification of PMSI - Illinois countrytink
fmissle Online
Diamond Poster
Joined: Jul 2007
Posts: 1,016
Pac NW
While this is definitely a question for your attorney, as various states may have adopted different versions or modified versions of UCC 9, I can give you a little bit of information.

Basically, a lender can obtain a PMSI in Inventory over a prior existing blanket or "All inventory" lien if they meet the specific requirements spelled out in the Article.

https://www.law.cornell.edu/ucc/9/article9

Quote:
(b) [Inventory purchase-money priority.]

Subject to subsection (c) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in Section 9-330, and, except as otherwise provided in Section 9-327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:

(1) the purchase-money security interest is perfected when the debtor receives possession of the inventory;

(2) the purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;

(3) the holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and

(4) the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory


You may want to read this article for a little bit of background.
http://www.abfjournal.com/articles/benef...exities-is-key/

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