Secured Transactions: Priority: Sellers v. Secured Parties Podcast
The topic of this podcast is which party will prevail in a competition for collateral as between sellers and the creditor with a security interest in the debtor’s assets. While secured parties might expect to prevail with respect to their collateral most of the time, sellers of goods to a debtor who have not been paid for the goods also have expectations. This podcast will examine the rules that come into play in three situations: (1) when a secured creditor has used an after-acquired property clause, or otherwise has a floating lien on inventory, including the retention of title rules of U.C.C. §§ 1-201(b)(35) and 2-401; (2) purchase money security interests under § 9-324; and (3) the seller’s right of reclamation arising under U.C.C. § 2-702. These rules are commonly tested on law school and bar examinations. At the conclusion of this podcast, you should be able to (1) identify and describe when and how a seller will have to comply with Article 9 in order to protect its interest in goods delivered to a buyer that has not yet paid for the goods; and (2) apply the rules related to purchase money security interests and determine when a seller might have a right of reclamation under Article 2.