Fact Pattern 30-2A
Rely Credit Company loans Standard Manufacturing Company $50,000 and takes a se?curity interest in the equipment that Standard buys with the money and receives on July 1. Standard files for bankruptcy on July 12.
-Refer to Fact Pattern 30-2A. If Rely does not perfect its security inter?est before Standard files for bankruptcy, then Rely will be an unse?cured creditor and the trustee of Standard's estate can

Question

Fact Pattern 30-2A 
Rely Credit Company loans Standard Manufacturing Company $50,000 and takes a se?curity interest in the equipment that Standard buys with the money and receives on July 1. Standard files for bankruptcy on July 12.
-Refer to Fact Pattern 30-2A. If Rely does not perfect its security inter?est before Standard files for bankruptcy, then Rely will be an unse?cured creditor and the trustee of Standard's estate can

Quizplus · Accepted Answer

If Rely does not perfect its security interest before Standard files for bankruptcy, then Rely's interest will be unperfected and therefore avoidable by the trustee under any circumstances. This is because an unperfected security interest is not considered to have attached and does not have priority over other creditors. Therefore, Rely will be treated as an unsecured creditor in Standard's bankruptcy case.