Emery Corp. (Emery) (defendant) entered into security agreements that gave various creditors liens in Emery’s after-acquired property. This meant that Emery took out loans with these creditors and agreed to use property that Emery acquired after the agreements were executed to secure the loans. After taking out the loans, Emery purchased over $10,000 in yarn on credit from Lavonia Manufacturing Company (Lavonia) (plaintiff). Two days after Lavonia delivered the yarn, Emery filed for bankruptcy. Lavonia sent Emery a letter demanding the yarn be returned. In Emery’s bankruptcy proceeding, Lavonia and the other creditors disputed who was entitled to the yarn.