Puchase-money security interest priority under UCC

Answered by:

Question:

We have a "Purchase money Security Interest in all inventory, equipment, etc., per our UCC-1 filing. There are 4 other "All inventory, chattel paper, equipment ..whether now owned or hereafter acquired; all accessions...etc..." filings ahead of us that are current and have been continued and have not lapsed or been terminated. My question: If the company fails would we be in first place with the equipment purchased with our loan funds? I think not, but want to make sure.

Answer:

I would suggest consulting legal counsel as state law is likely to come into play with this. On the surface, it would seem logical to me that the existing UCC's with language "hereafter acquired" would give them priority, but there may be state law provisions regarding priority of purchase money liens.