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Priorities

15 January, 2016 - 09:40

LEARNING OBJECTIVES

  1. Understand the general rule regarding who gets priority among competing secured parties.
  2. Know the immediate exceptions to the general rule—all involving PMSIs.
  3. Understand the basic ideas behind the other exceptions to the general rule.

Priorities: this is the money question. Who gets what when a debtor defaults? Depending on how the priorities in the collateral were established, even a secured creditor may walk away with the collateral or with nothing. Here we take up the general rule and the exceptions.