Rely Credit Company loans Standard Manufacturing Company $50,000 and takes a security interest in the equipment that Standard buys with the funds and receives on July 1.Standard files for bankruptcy on July 12.Rely does not perfect its security interest before Standard files for bankruptcy.With respect to the equipment,Rely will be an unsecured creditor and the trustee of Standard's estate will

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Since Rely did not perfect its security interest in the equipment before Standard filed for bankruptcy, Rely's interest is unperfected and therefore will be considered an unsecured creditor. As such, the trustee of Standard's estate will have priority over Rely's interest under any circumstances. This is because bankruptcy law gives priority to secured creditors who have properly perfected their security interests, and if an interest is not perfected, it is considered unsecured.

Rely Credit Company Loans Standard Manufacturing Company $50,000 and Takes