[Pottery Store] A&B Bank loaned money to Potter's Pottery Store to finance the purchase of several kilns, a delivery van, and pottery wheels. In return, Potter's granted a security interest to A&B Bank for "all equipment of Potter's". The kiln manufacturer also wants to place a security interest on the kilns and the delivery van for Potter's Pottery.
-If the bank wants to have priority in its loan to the pottery store, how should the bank perfect its interest?

Question

Quizplus · Accepted Answer

To perfect its interest and ensure priority over other creditors, the bank must take specific actions based on the type of collateral. For the delivery van, which likely has a certificate of title, the bank needs to make a notation on that certificate. For the other items like kilns and pottery wheels, which do not have titles, filing a financing statement is the appropriate method of perfection. This approach ensures the bank's security interest is publicly recorded and has priority over subsequent claims.

[Pottery Store] A&B Bank Loaned Money to Potter's Pottery Store