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Destiny Drilling Financed Its Latest Project with a General Security

Question 41

Multiple Choice

Destiny Drilling financed its latest project with a general security agreement with RBc.They signed a security agreement and received the loan on August 1.RBC filled out the financing statement, but forgot to file it.On December 12, Destiny required additional funding for the project, so it entered into a new security agreement that gave CIBC rights in all Destiny's physical capital.CIBC filed a one-year financing statement.On December 13 of the following year, Destiny defaulted on both loans.Which of the following is true?


A) RBC should be paid first because it has a general security agreement.
B) RBC should be paid first because at the time of default, both interests are unsecured.
C) CIBC should be paid first because it perfected its interest.
D) CIBC should be paid first because its interest is smaller.
E) RBC should be paid first because its interest is larger.

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