Wedney,Inc.has a purchase money security interest in one of Yoro Chicken's meat processing machines.Wedney filed a financing statement on the day the machine was delivered,perfecting its interest.Great State Bank already had a security interest in the machine.Which party has superior priority rights in the meat processing machine?

Question

Quizplus · Accepted Answer

Wedney has superior priority rights in the meat processing machine because they have a Purchase Money Security Interest (PMSI) in collateral other than inventory, and they perfected their interest on the day the machine was delivered. According to the Uniform Commercial Code (UCC), a PMSI in collateral other than inventory takes priority over a conflicting security interest if the PMSI is perfected at the time the debtor receives the collateral or within 20 days after he receives it. Great State Bank's earlier security interest is not relevant in this case because Wedney's PMSI takes priority. The party who is first to repossess the collateral does not have priority under the UCC.