Special Issues in Priority

Special Issues in Priority

Learn about special issues of priority, including the merger or acquisition of a company, collateral involving fixtures, collateral that is an accession or commingled, or collateral that is involved in a transaction involving a consignment or Article 2.


In this lesson, we’ll learn about special issues of priority. 

I. Priority of Security Interests in Transferred Collateral

A party that receives transferred collateral subject to another’s security interest isn’t a bona fide purchaser, and doesn’t qualify as either a buyer in the ordinary course of business or a buyer of consumer goods. Special rules apply to priority in this case. 

Transfer of Collateral from Debtor 1 to Debtor 2; Both Continue to Exist

Let’s start with the situation...