Muskoka Heritage Homes Inc builds vacation homes in a traditional style.In order to finance its acquisition of some earth-moving machinery,Laurentian Bank lent Muskoka $50 000.Muskoka gave Laurentian a security interest in all of its present and future assets to secure its obligation to repay the loan.Laurentian did not perfect its security interest.Subsequently,Muskoka had a dispute with one of its suppliers.The supplier sued and got a judgment against Muskoka,but had not yet taken steps to seize Muskoka's assets.Muskoka defaulted on its obligations to Laurentian.Laurentian has priority over the claim of the supplier,even though the supplier has successfully obtained a judgment.

Question

Quizplus · Accepted Answer

Laurentian has priority because it has a security interest, even though unperfected, over Muskoka's assets, while the supplier only has a judgment, which does not automatically create a lien or priority over the assets.

Muskoka Heritage Homes Inc Builds Vacation Homes in a Traditional