The core issue here is determining when a purchase money security interest (PMSI) in inventory remains perfected against a buyer in the ordinary course of business under Kansas law, specifically UCC § 9-320. A PMSI holder in inventory must satisfy two conditions to retain perfection against such a buyer. First, the PMSI must be perfected when the buyer receives possession of the goods. Second, the PMSI holder must have given the required notification to the debtor before the commencement of the 90-day period specified in UCC § 9-317(e) for PMSI perfection against competing claims. Kansas follows the general UCC provisions. In this scenario, AgriBank’s security interest was perfected on May 1st. The debtor, Wheat Farms, received the collateral (fertilizer) on May 1st. The buyer in the ordinary course, Grain Co., purchased the fertilizer on May 15th. AgriBank’s PMSI was perfected on May 1st, which is before Grain Co. took possession. The crucial element is whether AgriBank provided the required notification to Wheat Farms prior to the commencement of any 90-day period that would be relevant for perfection against competing claims. UCC § 9-317(e) states that a PMSI in collateral other than inventory is perfected against a buyer of goods that receives possession of the collateral from the seller if the PMSI is perfected before the buyer receives possession. For inventory, UCC § 9-320(a) protects buyers in the ordinary course of business who buy from a seller who is a merchant dealing in goods of that kind, unless the buyer knows that the sale is in violation of the security agreement. However, UCC § 9-320(e) provides an exception: a buyer in the ordinary course of business takes free of a security interest created by the seller if the buyer receives possession of the goods, has no notice that the sale is in violation of the security agreement, and the security interest is not perfected. Here, the security interest *is* perfected. The critical point is that for inventory, a buyer in the ordinary course of business takes free of a security interest *even if perfected*, provided the buyer has no knowledge that the sale is in violation of the security agreement. UCC § 9-320(a) states this directly. Therefore, AgriBank’s perfected PMSI does not prevent Grain Co. from taking free of it, as Grain Co. is a buyer in the ordinary course of business and there is no indication they had knowledge of any violation of the security agreement. The fact that AgriBank’s interest was perfected before Grain Co. took possession is secondary to the rule in UCC § 9-320(a) which allows buyers in the ordinary course to take free of perfected security interests in inventory unless they have knowledge of the violation.

The Kansas Uniform Commercial Code, specifically Article 9, governs secured transactions. When a debtor defaults on a secured obligation, the secured party has rights in the collateral. These rights are typically exercised through repossession and disposition of the collateral. The proceeds from the disposition must be applied in a specific order. First, reasonable expenses of repossession and sale, including attorney’s fees and legal expenses if provided for in the security agreement and permitted by law, are paid. Next, the satisfaction of the obligation secured by the security interest being foreclosed is prioritized. If there are multiple secured parties with perfected security interests in the same collateral, their priority is generally determined by the first-to-file or first-to-perfect rule. After satisfying the secured debt and any junior liens, any remaining surplus proceeds must be turned over to the debtor. If the proceeds are insufficient to cover the secured debt and expenses, the debtor typically remains liable for the deficiency. In this scenario, after the reasonable expenses of disposition, the proceeds are applied to the debt owed to the first secured party. If any funds remain, they would then be applied to the debt owed to the second secured party. Since the question implies a single secured party and the disposition of collateral, the correct application of proceeds is to satisfy the secured obligation and then any remaining balance goes to the debtor. Therefore, the secured obligation is satisfied first from the proceeds.

The core issue here is the perfection of a security interest in a deposit account. Under Kansas UCC § 9-104(a), a security interest in a deposit account can only be perfected by control. Control is defined in Kansas UCC § 9-104(b) and generally means the secured party is the bank in which the deposit account is maintained, has agreed with the depositary bank that the bank will comply with instructions from the secured party concerning the balance of the deposit account, or has itself become the customer of the bank with respect to the deposit account. A mere filing of a financing statement, as attempted by Prairie Bank, is insufficient to perfect a security interest in a deposit account, as filing generally perfects security interests in collateral other than deposit accounts, investment property, letter-of-credit rights, and certain other specified types of collateral. Therefore, even though Prairie Bank filed a financing statement, its security interest in the deposit account held by Farmers State Bank remains unperfected against a buyer of the account that gives value and receives delivery of the account, or against a lien creditor. Kansas UCC § 9-312(b)(1) specifies that filing is not effective to perfect a security interest in deposit accounts. Kansas UCC § 9-309(3) states that a security interest in a deposit account is perfected by control. The scenario describes a situation where a third party, without knowledge of Prairie Bank’s unperfected security interest, acquires rights in the deposit account. In such a scenario, the unperfected security interest of Prairie Bank would generally be subordinate to the rights of a bona fide purchaser or a lien creditor. The question asks about the status of Prairie Bank’s security interest. Since filing is not a permissible method of perfection for deposit accounts in Kansas, and control was not obtained, Prairie Bank’s security interest is unperfected.

The core issue in this scenario revolves around the perfection of a security interest in accounts that are part of a sale of a business, specifically a sale of substantially all of the assets of a business. Under Kansas UCC § 9-309(3), a security interest in accounts, as part of a sale of accounts or chattel paper, is automatically perfected. This means that no filing of a financing statement is required for perfection when accounts are sold as part of a sale of substantially all of the assets of the seller’s business. The transaction described is precisely this: AgriCorp sells its entire grain storage business, which includes its accounts receivable. Therefore, AgriCorp’s security interest in these accounts, arising from the sale of its business assets, is automatically perfected upon attachment. The subsequent filing by AgriCorp is a protective measure but does not affect the automatically perfected status of its interest in the accounts from the moment of attachment. Thus, the perfection is effective from the date of attachment.

The scenario involves a purchase money security interest (PMSI) in inventory. In Kansas, under UCC § 9-324(a), a PMSI in inventory generally has priority over a conflicting security interest in the same inventory, provided certain conditions are met. These conditions include: 1) the PMSI is perfected when the debtor receives possession of the inventory, or within 20 days thereafter; and 2) the PMSI holder sends an authenticated notification to any prior secured party whose UCC-1 financing statement covers the inventory. This notification must state that the sender has or expects to acquire a PMSI in inventory of the debtor and describe the inventory. The notification is effective for five years. In this case, AgriBank’s security interest was perfected on March 1st. AgriBank then sent its notification to Farm Credit Services on March 5th, which was within 20 days of Farm Credit Services’ debtor receiving possession of the new inventory. Farm Credit Services, holding a prior perfected security interest, received this notification. Since AgriBank complied with the notification requirements of UCC § 9-324(a), its PMSI in the new inventory takes priority over Farm Credit Services’ earlier perfected security interest. Therefore, AgriBank has priority.

The core issue here is the perfection of a security interest in a deposit account. Under Kansas UCC § 9-104(a), a security interest in a deposit account as original collateral can only be perfected by control. Control is defined in Kansas UCC § 9-104(a)(1)-(3) as either becoming the bank’s customer with respect to the deposit account, or by agreeing with the bank that the bank will comply with instructions concerning the deposit account without the secured party’s further consent. In this scenario, Sterling Bank has a security interest in the deposit account of Prairie Grain LLC. Sterling Bank is the bank with which the deposit account is maintained, and it has entered into a deposit account control agreement (DACA) with Prairie Grain LLC. This DACA explicitly states that Sterling Bank will comply with instructions regarding the account only upon written direction from the secured party, which is Sterling Bank itself in this context, acting as the secured party. This arrangement grants Sterling Bank “control” over the deposit account because it is the bank where the account is held and it has established the terms under which instructions will be followed, effectively making it the “customer” for purposes of control as defined in the UCC, or at least having the bank agree to comply with its own instructions regarding the account. Therefore, Sterling Bank has perfected its security interest in the deposit account by control. Kansas UCC § 9-312(b)(1) also states that a security interest in a deposit account as original collateral can be perfected only by control.

The scenario involves a purchase money security interest (PMSI) in inventory. A PMSI arises when a secured party gives value to enable the debtor to acquire rights in collateral, and the value so given is in fact used for that purpose. In Kansas, as under UCC Article 9 generally, to maintain priority over other secured parties and buyers, a PMSI holder in inventory must satisfy specific requirements. First, the PMSI must have attached. Second, the secured party must have perfected its security interest. Perfection for inventory typically requires filing a financing statement and, crucially, giving “notification” to any other secured party who previously filed a financing statement covering the same collateral. This notification must be sent before the debtor receives possession of the inventory. The notification must state that the sender has or expects to acquire a PMSI in inventory of the debtor and describe the inventory. If the secured party meets these requirements, its PMSI in the inventory will have priority over prior perfected security interests in the same inventory. In this case, AgriBank’s security interest attached when the agreement was made, value was given (the loan), and the debtor had rights in the collateral (after receiving the seed). AgriBank perfected by filing. However, to maintain its priority as a PMSI holder against a prior perfected secured party like FarmCredit, AgriBank needed to send the required notification to FarmCredit before the debtor received possession of the seed. Assuming AgriBank sent the notification as required by UCC § 9-324(b) (as adopted in Kansas), its PMSI in the seed inventory would have priority. The question hinges on the timely and proper notification to FarmCredit. If AgriBank failed to provide the required notification to FarmCredit before the debtor received possession of the seed, FarmCredit’s prior perfected security interest would have priority over AgriBank’s PMSI. Therefore, the priority depends on AgriBank’s compliance with the notification requirement.

The core issue here revolves around the perfection of a security interest in accounts receivable. Under Kansas UCC Article 9, a security interest in accounts is generally perfected by filing a financing statement. However, there’s a specific exception for “as-extracted collateral” which applies to oil and gas rights when they are extracted. In this scenario, the collateral is accounts arising from the sale of timber products. Timber products, once severed from the land, are generally considered goods, not real estate. Therefore, the security interest in the accounts generated from the sale of these severed timber products would not be treated as as-extracted collateral. The perfection method for accounts is filing a financing statement in the jurisdiction where the debtor is located. Kansas law, specifically K.S.A. § 84-9-307, addresses the location of debtors. For a business like TimberCorp, which is incorporated in Kansas and has its chief executive office there, its location is Kansas. Thus, a financing statement must be filed in Kansas to perfect the security interest in these accounts. The failure to file in Kansas means the security interest is unperfected. Under K.S.A. § 84-9-310, a filed financing statement is generally required to perfect a security interest, with limited exceptions that do not apply here. An unperfected security interest is subordinate to the rights of a lien creditor, such as a judgment creditor who has levied on the collateral.

The scenario involves a purchase money security interest (PMSI) in inventory. Under UCC § 9-324, a secured party with a PMSI in inventory generally has priority over other secured parties and lien creditors. However, to maintain this priority against other secured parties who also have a security interest in the same inventory, the PMSI holder must satisfy specific notification requirements. Specifically, UCC § 9-324(b) requires that the PMSI holder: (1) have a perfected security interest in the inventory when the debtor receives possession of the inventory; (2) give an authenticated notification to any other secured party whose security interest was perfected before the debtor received possession of the inventory; and (3) the notification states that the PMSI holder expects to acquire a PMSI in inventory of the type the debtor acquired; and (4) the notification is sent within the twenty-day period specified in UCC § 9-312(e), which is interpreted as the twenty-day period *after* the debtor receives possession of the inventory for PMSI in inventory. In this case, AgriBank’s security interest was perfected first. When FarmCo obtained the new tractor, it was inventory. AgriBank’s existing security interest in FarmCo’s general inventory would attach to the new tractor. However, CropCredit’s PMSI in the tractor would have priority if properly perfected and if CropCredit provided the required notification to AgriBank. The notification was sent on April 15th, which is *after* FarmCo received possession of the tractor on April 10th. The UCC § 9-324(b) notification requirement is typically interpreted to mean that the notification must be sent *before* the debtor receives possession of the inventory, or within a very short window thereafter, often interpreted as within the same twenty-day period as for other PMSI notifications, but relating to the receipt of the collateral. The failure to send the notification within the legally prescribed timeframe means CropCredit’s PMSI, while perfected, does not take priority over AgriBank’s prior perfected security interest in the same collateral. Therefore, AgriBank has priority.

The core issue here revolves around the perfection of a security interest in accounts, specifically in the context of a Kansas-based transaction. Under Kansas UCC § 9-301(1)(d) and § 9-309(2), a security interest in accounts is generally perfected by filing a financing statement. However, there is an exception for certain “casual and isolated sales” of accounts. Kansas law, mirroring the general UCC approach, does not require filing for a security interest in accounts that constitute or are part of only a few transactions. The scenario describes a secured party taking a security interest in all of a debtor’s accounts, which is a significant and ongoing business operation, not a casual or isolated sale. Therefore, to have priority over a subsequent buyer of those accounts, the secured party must have perfected its security interest. Perfection for accounts is achieved by filing a financing statement in the appropriate jurisdiction. Since the debtor is located in Kansas and the collateral is accounts, the financing statement should be filed with the Kansas Secretary of State. A buyer of accounts takes free of an unperfected security interest. Without a filed financing statement, the buyer of the accounts would have priority over the secured party. Thus, the secured party’s failure to file means its security interest is unperfected against a buyer of those accounts.

The scenario involves a purchase money security interest (PMSI) in inventory. In Kansas, under UCC § 9-324(b), a PMSI in inventory generally has priority over a conflicting security interest in the same inventory if the PMSI holder meets specific requirements. These requirements include: 1) the security interest being a PMSI; 2) the PMSI holder having perfected its security interest in the inventory by filing a financing statement; and 3) the PMSI holder giving an authenticated notification to any prior secured party that has filed a financing statement covering the same inventory. This notification must be sent within a specific timeframe before the debtor receives possession of the inventory. The notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor, describing the inventory and the secured party. In this case, AgriBank has a prior perfected security interest in all of Farmer Giles’s crops, which are inventory. AgriBank’s security interest is a floating lien. When FarmCo sells the seed to Farmer Giles under a PMSI, FarmCo must ensure it complies with the notification requirements of UCC § 9-324(b) to gain priority over AgriBank’s existing security interest. The notification must be sent to AgriBank, describing the seed and FarmCo’s expected PMSI. If FarmCo fails to send this notification, or sends it too late, AgriBank’s prior perfected security interest will generally continue to have priority over FarmCo’s PMSI in the seed. Therefore, FarmCo’s failure to notify AgriBank before Farmer Giles received the seed means AgriBank’s prior perfected security interest in the crops (which include the seed as inventory) remains superior to FarmCo’s unperfected or improperly perfected PMSI.

The scenario involves a purchase money security interest (PMSI) in inventory. In Kansas, as under Article 9 of the UCC, a secured party with a PMSI in inventory must satisfy specific requirements to maintain priority over other secured parties and buyers. For a PMSI in inventory, perfection requires filing a financing statement and providing any required notification to other secured parties who have filed against the same collateral before the date of the PMSI filing. Specifically, under Kansas law, K.S.A. § 84-9-324(b) governs PMSI priority in inventory. This section states that a PMSI in inventory has priority over a conflicting security interest in the same inventory if the PMSI secured party satisfies two conditions: (1) the PMSI is perfected when the debtor receives possession of the inventory, and (2) the PMSI secured party gives an authenticated notification to any other secured party that has filed a financing statement covering the inventory before the filing of the PMSI financing statement. The notification must be sent within a specific timeframe, typically before the debtor receives possession of the inventory, or within a short window after. In this case, the notification was sent on May 1st, and the debtor received possession of the inventory on May 15th. This timing satisfies the requirement that the notification be sent before the debtor receives possession. Therefore, AgriBank’s PMSI in the farm equipment inventory has priority over the prior perfected security interest of FarmCredit Services. The key is the timely notification to the prior secured party before the debtor obtained possession of the inventory.

The scenario involves a purchase money security interest (PMSI) in equipment granted by Prairie Ag Supplies to Heartland Farm Services. A PMSI arises when a seller of collateral, or a person who gives new value to enable the debtor to acquire rights in, or the use of, collateral, takes possession of the collateral. In this case, Heartland Farm Services provided the financing for Prairie Ag Supplies to acquire the specialized combine harvester, which is the collateral. For a PMSI to have priority over a prior perfected security interest in the same collateral, the PMSI holder must satisfy specific requirements under Article 9 of the Uniform Commercial Code (UCC), as adopted in Kansas. These requirements include: 1. **Perfection:** The PMSI must be perfected by filing a financing statement before or within a specified period after the debtor receives possession of the collateral. Kansas UCC § 9-317(e) generally states that a security interest is subordinate to the rights of a buyer of goods, a lessee of goods, or a licensee of a general intangible if the buyer, lessee, or licensee receives delivery of the collateral without knowledge of the security interest or rights of the secured party. However, UCC § 9-317(a)(2) provides that an unperfected security interest is subordinate to the rights of a person that becomes a buyer of goods, a lessee of goods, or a licensee of a general intangible, other than a secured party or a buyer of accounts, chattel paper, payment intangibles, or promissory notes, if the person receives delivery of the collateral without knowledge of the security interest and before the security interest is perfected. 2. **Notification (for PMSI in inventory):** While not directly applicable here as the collateral is equipment and not inventory, it’s important to note that for PMSIs in inventory, the secured party must also give notice to any existing secured party of record. 3. **PMSI in Equipment:** For equipment, the PMSI holder generally needs to perfect its interest by filing a financing statement. If another secured party already has a perfected security interest in the same collateral, the PMSI holder will typically have priority if it perfects its interest within 20 days after the debtor receives possession of the collateral under UCC § 9-317(c). However, the question states that First National Bank of Wichita had a prior perfected security interest. The critical factor for PMSI priority over a prior perfected security interest in non-inventory collateral is whether the PMSI is perfected within the 20-day grace period. If Heartland Farm Services filed its financing statement within 20 days of Prairie Ag Supplies receiving possession of the combine, its PMSI would have priority over First National Bank’s prior perfected security interest. If they filed *after* this 20-day period, First National Bank’s prior perfected security interest would retain priority. The question implies that Heartland Farm Services filed *after* First National Bank’s security interest was perfected, and the key is when Heartland filed relative to Prairie Ag’s possession. Without a specific filing date for Heartland relative to Prairie Ag’s possession, the default rule for PMSI priority over prior perfected interests in equipment applies. The general rule is that a PMSI has priority over a prior perfected security interest if it is perfected within the 20-day period. If Heartland filed its financing statement on July 15th, and Prairie Ag received possession on July 1st, that would be within the 20-day window. If Prairie Ag received possession on June 1st and Heartland filed on July 15th, that would be outside the 20-day window. The question states Heartland filed on July 15th. If Prairie Ag received possession of the combine on July 1st, Heartland’s filing would be within the 20-day period, granting it priority. If Prairie Ag received possession before June 25th, Heartland’s filing would be outside the 20-day period. The most advantageous outcome for Heartland, assuming they acted diligently, would be if their filing occurred within the 20-day window. The calculation is not a mathematical one, but rather an application of the 20-day rule. If Prairie Ag took possession on July 1st, then July 21st is the end of the 20-day period. Filing on July 15th is within this period. Therefore, Heartland’s PMSI would have priority.

This question tests the understanding of the priority rules for conflicting security interests in Kansas, specifically when a purchase money security interest (PMSI) is involved and the collateral is equipment. Under Kansas UCC § 9-324, a PMSI in equipment generally has priority over a conflicting security interest in the same equipment if the PMSI is perfected by filing no later than twenty days after the debtor receives possession of the collateral. However, the crucial element for the PMSI holder to maintain this superpriority against a prior perfected security interest is that the PMSI must have been perfected *before* the debtor received possession of the collateral. If the prior secured party had already filed a financing statement covering the same equipment and the debtor obtained possession of the equipment, the PMSI holder must file their financing statement within the grace period, but this filing is only effective against the prior secured party if it occurs before the debtor receives possession. If the PMSI is filed after the debtor receives possession, even within the twenty-day window, it will not cut off the rights of the prior perfected secured party. Therefore, the filing must precede or coincide with the debtor’s possession for the PMSI to have superpriority over a previously perfected security interest.

The scenario involves a security interest in farm products. In Kansas, under UCC Article 9, a security interest in farm products is generally perfected by filing a financing statement in the office of the Secretary of State. However, there is a critical exception related to “bona fide purchasers” of farm products. Kansas law, specifically K.S.A. 84-9-320(a) (as adopted in Kansas), provides that a buyer in the ordinary course of business of farm products takes free of a security interest created by the seller, even if the security interest is perfected and even if the buyer knows of the perfection, unless the buyer receives notice of the security interest within the time and in the manner prescribed by K.S.A. 84-9-320(e). K.S.A. 84-9-320(e) outlines the specific notice requirements for buyers of farm products. A buyer in the ordinary course of business purchasing farm products from a person engaged in farming operations takes free of a security interest created by the seller, even if the security interest is perfected and even if the buyer has knowledge of the perfection, unless the buyer has received notice of the security interest as provided in subsection (e). Subsection (e) requires that the secured party provide notice of the security interest to the buyer in the manner prescribed by K.S.A. 84-9-320(e). This notice must be provided by the secured party to the buyer in the ordinary course of business of farm products. Therefore, for the security interest to remain effective against the buyer, the secured party must have provided proper notice. If no such notice was provided, the buyer takes the goods free of the security interest. The question asks about the status of the security interest after the sale. Since the buyer purchased the corn in the ordinary course of business from a farmer and there is no indication that the secured party provided the required notice under K.S.A. 84-9-320(e), the buyer takes the corn free of the security interest.

In Kansas, when a secured party has a perfected security interest in collateral and that collateral is sold in the ordinary course of business to a buyer who is not aware that the sale is prohibited under the security agreement, that buyer takes the collateral free of the security interest. This principle is codified in Kansas Statutes Annotated (K.S.A.) § 84-9-320. The purpose of this provision is to facilitate commerce by allowing ordinary course buyers to acquire goods without the burden of investigating every prior security interest. The secured party’s remedy in such a situation is typically against the debtor for breach of the security agreement, not against the buyer. The secured party can, however, file a financing statement that includes a description of farm products, which may impact the protection afforded to certain buyers of those products under different provisions, but for general goods sold in the ordinary course of business, the buyer’s protection is paramount. The buyer must be a person buying in ordinary course of business, not know the sale violates the security interest, and the secured party must have authorized the sale.

In Kansas, the perfection of a security interest in a deposit account as original collateral requires a secured party to obtain “control” over the account. Control is defined in Kansas UCC § 9-104(a) and generally means that the secured party is the bank in which the deposit account is maintained, has agreed with the debtor in an authenticated record that the bank will comply with instructions directing disposition of the amounts in the deposit account without the bank’s further consent, or has become the assignee of the deposit account. Filing a financing statement alone is insufficient to perfect a security interest in a deposit account when it is original collateral. Kansas UCC § 9-312(b)(1) explicitly states that filing is not effective to perfect a security interest in deposit accounts, except as provided with respect to proceeds of other collateral. Therefore, for a security interest granted in a deposit account itself, control is the exclusive method of perfection.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Kansas law, specifically K.S.A. 84-9-324, a PMSI in inventory has priority over a conflicting security interest in the same inventory if certain conditions are met. The creditor holding the PMSI must have perfected its security interest by filing a financing statement before the debtor receives possession of the inventory. Furthermore, the PMSI creditor must have sent an authenticated notification to any prior secured party whose financing statement covers the same inventory. This notification must state that the PMSI creditor expects to take possession of the inventory, and it must be sent within a specified timeframe, generally within five years before the debtor receives possession of the inventory. In this case, “Agri-Finco” filed its financing statement on March 1st and sent the notification to “Farm-Lend” on March 15th, which was before the debtor received possession of the tractors on April 1st. Farm-Lend’s earlier filing on February 1st is a prior perfected security interest. However, Agri-Finco’s timely filing and notification to Farm-Lend, coupled with its PMSI status in the inventory, grants it priority over Farm-Lend with respect to the tractors. The key is that Agri-Finco met the requirements for PMSI priority in inventory by perfecting its interest and notifying the prior secured party before the debtor received possession.

The core issue in this scenario revolves around the perfection of a security interest in accounts that are part of a sale of a business. Under Kansas law, which largely follows UCC Article 9, a security interest in accounts can be perfected by filing a financing statement. However, the UCC provides specific rules for when a security interest is automatically perfected or when filing is not required. In this case, the sale of accounts is likely a true sale of accounts, not a secured transaction, unless the seller retains a significant interest. Even if considered a secured transaction, the UCC’s treatment of accounts is key. Kansas UCC § 84-9-309(2) states that a security interest in a supporting obligation for an account or chattel paper is automatically perfected. However, this does not directly apply to the accounts themselves. Kansas UCC § 84-9-310(a) generally requires filing for perfection, but there are exceptions. A key exception is found in Kansas UCC § 84-9-309(2), which provides for automatic perfection of a security interest in a supporting obligation for accounts or chattel paper. More importantly, Kansas UCC § 84-9-309(3) addresses the perfection of security interests in “a supporting obligation for a security interest in or a supporting obligation for chattel paper or accounts.” This provision is often interpreted to mean that if the underlying collateral is an account, the security interest in the account itself must be perfected by filing. The UCC prioritizes filing for accounts to provide notice to potential future creditors. Therefore, a financing statement is the appropriate method for perfecting a security interest in accounts. The fact that the transaction is a bulk sale does not negate the perfection requirements for accounts under Article 9, though bulk sale rules under Article 6 of the UCC (as adopted in Kansas, if applicable to the specific transaction) might have other notice requirements. However, for perfection of the security interest itself, filing is the standard. The question is designed to test the understanding that while some collateral types have automatic perfection or different perfection methods, accounts generally require filing for perfection under Kansas UCC Article 9 to provide public notice. The transaction being a sale of a business that includes accounts means the accounts are the primary collateral.

The core issue here is the perfection of a security interest in a deposit account. Under Kansas UCC § 9-304(a), a security interest in a deposit account can only be perfected by control. Control is defined in Kansas UCC § 9-104(a) as obtaining the rights described in § 9-104(b), (c), or (d). Specifically, § 9-104(b) states that a secured party has control over a deposit account if the secured party is the bank with which the deposit account is maintained. In this scenario, Prairie Bank is the bank where the debtor, AgriCorp, maintains its operating deposit account. Therefore, Prairie Bank has automatically obtained control over the deposit account by virtue of being the depositary bank, and its security interest is automatically perfected upon attachment, without the need for a separate filing or notification to AgriCorp’s other creditors. Kansas UCC § 9-308(e) confirms that a security interest in a deposit account perfected by control is effective against purchasers of the account, including bankruptcy trustees, from the time of control. The filing of a financing statement is ineffective to perfect a security interest in a deposit account.

The core issue here is the proper filing of a financing statement to perfect a security interest in accounts that arise from the sale of goods by a merchant in Kansas. Under Kansas UCC § 9-301(1) and § 9-308, a security interest in accounts is generally perfected by filing a financing statement in the jurisdiction where the debtor is located. For a merchant operating as a sole proprietorship in Kansas, the debtor’s location is typically considered to be Kansas. The financing statement must contain sufficient information to identify the debtor and the secured party, and indicate the collateral covered. In this scenario, the collateral is “all accounts arising from the sale of farm equipment.” A financing statement filed in the Kansas Secretary of State’s office is the correct method for perfecting a security interest in accounts. Filing in the county of the debtor’s residence or place of business, or in the state of the collateral’s location (which is also Kansas for accounts arising from sales within Kansas), would be incorrect or at least insufficient compared to the statewide filing. The perfection date is triggered by the filing of the financing statement. Therefore, the filing in the Kansas Secretary of State’s office is the operative act for perfection.

In Kansas, a purchase money security interest (PMSI) in inventory generally requires both attachment and perfection to gain priority over other secured parties. For inventory, perfection is typically achieved by filing a financing statement. However, a special rule applies to PMSIs in inventory when the secured party also gives new value to enable the debtor to acquire the inventory. Under Kansas law, specifically UCC § 9-324(b), a secured party with a PMSI in inventory has priority over a conflicting security interest in the same inventory if certain conditions are met. These conditions include: 1) the PMSI is perfected when the debtor receives possession of the inventory; 2) a financing statement covering the inventory is filed before the debtor receives possession of the inventory; and 3) the financing statement or a notice of the PMSI states that the secured party has a PMSI in inventory. Furthermore, the secured party with the PMSI must notify any other secured party who previously filed a financing statement covering the same inventory or who has perfected a security interest in that inventory. This notification must be sent before the debtor receives possession of the inventory. The notification must state that the PMSI holder expects to acquire a PMSI in inventory of a described type. The priority granted by § 9-324(b) applies to new value given to enable the debtor to acquire the inventory. Therefore, for the scenario presented, the secured party who financed the purchase of the new excavators and filed their financing statement first, and who also provided the requisite notification to the prior secured party, will have priority.

The core issue here is the proper perfection of a security interest in accounts that are part of a sale of a business. Kansas law, like most jurisdictions under UCC Article 9, generally requires filing a financing statement to perfect a security interest in accounts. However, there are specific exceptions. K.S.A. 84-9-109(d)(3) states that Article 9 does not apply to the sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of a business. This exclusion is critical. When accounts are sold as part of a business sale, the transaction is not considered a secured transaction for the purpose of Article 9’s filing requirements. Instead, it is treated as a true sale of a general intangible. Therefore, no filing is required to effectuate the transfer of ownership of these accounts in such a scenario. The UCC filing system is designed for security interests, not for perfecting title in a bona fide sale of assets that are not themselves collateral in the traditional sense of a secured loan. The exclusion in K.S.A. 84-9-109(d)(3) is a deliberate carve-out to avoid cluttering the UCC filing system with notifications of business asset sales that do not involve the creation or enforcement of a security interest. The intent is to distinguish between a transaction where accounts are used as collateral for a loan and one where the accounts themselves are the subject of a sale.

The core issue here is determining the proper place to file a financing statement for a security interest in a farm product, specifically soybeans, when the debtor is a business entity organized under the laws of Kansas and the collateral is located in Kansas. Article 9 of the Uniform Commercial Code, as adopted in Kansas (K.S.A. § 84-9-301 et seq.), governs the perfection of security interests. For farm products, perfection is generally achieved by filing a financing statement in the office of the register of deeds in the county where the debtor is located. K.S.A. § 84-9-307(a) states that the law of the jurisdiction where the debtor is located governs perfection as to a security interest in goods. For a registered organization like “Prairie Harvest Enterprises, LLC,” its location is determined by the jurisdiction of its organization, which is Kansas. K.S.A. § 84-9-307(e) clarifies that for a registered organization, its location is the jurisdiction whose law governs its organization. Therefore, the financing statement must be filed in the county in Kansas where Prairie Harvest Enterprises, LLC is located. While K.S.A. § 84-9-501(a)(1) generally dictates filing with the Secretary of State for most collateral, K.S.A. § 84-9-502(c)(1) provides an exception for farm products, requiring filing in the county of the debtor’s location. This specific rule for farm products is crucial for ensuring notice to potential buyers of those products, who are often in the same locality. The filing with the Secretary of State would be the correct location for general intangibles or other business assets of Prairie Harvest Enterprises, LLC, but not for the farm products themselves. Filing in Nebraska would be incorrect as the collateral and the debtor’s organization are in Kansas. Filing in the county where the soybeans are physically located is also incorrect for perfection purposes under Article 9 for farm products when the debtor is a business entity; the location of the debtor controls.

The scenario involves a purchase money security interest (PMSI) in equipment granted by Prairie Harvest Agribusiness, Inc. to Heartland Equipment Finance. A PMSI is a security interest taken by a seller or lender to secure an obligation incurred by the debtor in connection with the purchase of collateral. For a PMSI to be perfected and have priority over other security interests, specific steps must be taken under Article 9 of the Uniform Commercial Code, as adopted in Kansas. The critical factor here is the filing of a financing statement. Kansas law, like most jurisdictions, requires a financing statement to be filed in the appropriate place to perfect a security interest in equipment, unless an exception applies. For equipment, this generally means filing with the Secretary of State. Furthermore, for a PMSI to have superpriority over a previously perfected security interest in the same collateral, the PMSI lender must file its financing statement within a specific “grace period” after the debtor receives possession of the collateral. This grace period is typically 20 days. In this case, Heartland Equipment Finance filed its financing statement on May 15th, which is 25 days after Prairie Harvest Agribusiness, Inc. received the combine harvester on April 20th. Since the filing occurred after the 20-day grace period, Heartland’s PMSI is not perfected against the prior perfected security interest held by Sunflower State Bank. Therefore, Sunflower State Bank’s prior perfected security interest in after-acquired property, which includes the combine harvester, will have priority. The priority rules in Article 9 generally dictate that a prior perfected security interest has priority over a subsequently perfected security interest, unless specific statutory provisions, such as the PMSI grace period, allow for an exception. Because the PMSI filing was late, the exception does not apply, and the general priority rule prevails.

The scenario involves a purchase money security interest (PMSI) in equipment granted by Prairie Agribusiness to Heartland Bank. A PMSI arises when credit is extended to a debtor for the purpose of enabling the debtor to acquire rights in, and the collateral is in fact so acquired. In this case, Heartland Bank financed the purchase of the combine harvester. For a PMSI to be perfected and have priority over other security interests, including earlier perfected security interests, the secured party must file a financing statement and, in most cases, the debtor must have possession of the collateral. However, Article 9 of the Uniform Commercial Code, as adopted in Kansas, provides specific rules for PMSI perfection in equipment. Kansas law, consistent with UCC § 9-317(e), generally requires a PMSI holder to file a financing statement within 20 days after the debtor receives possession of the collateral to maintain its priority against a buyer or lessee that receives delivery of the collateral without knowledge of the security interest and for value. Crucially, for PMSI priority over a prior perfected security interest in the same collateral, the PMSI holder must typically file its financing statement *before* the debtor receives possession of the collateral or within a 20-day grace period if the filing is made after possession. However, a more critical rule for priority over other perfected secured parties is found in UCC § 9-324. This section states that a perfected PMSI in equipment has priority over a conflicting security interest in the same collateral if the PMSI is perfected when the debtor receives possession of the collateral or within 20 days thereafter. Given that Heartland Bank filed its financing statement on May 15th, after Prairie Agribusiness received possession of the combine on May 10th, the 20-day grace period applies. Therefore, Heartland Bank’s filing on May 15th is within the 20-day window following Prairie Agribusiness’s receipt of possession on May 10th. This timely filing perfects Heartland Bank’s PMSI and grants it priority over any conflicting security interests that arose before the filing, including the earlier perfected security interest held by Wichita Farm Credit. The key is that the filing occurred within the statutory period after possession.

The question revolves around the priority of security interests when a debtor defaults and multiple creditors have claims against the same collateral. In Kansas, as under Article 9 of the UCC, the general rule for priority among secured parties is “first in time, first in right,” meaning the secured party who first files a financing statement or perfects its security interest generally has priority. However, purchase-money security interests (PMSIs) have special priority rules. A PMSI in inventory generally requires the secured party to give notice to any other secured party whose security interest covers the same inventory and who has filed a financing statement covering that inventory before the date of the filing of the PMSI financing statement. If the PMSI lender meets these requirements, their interest in the inventory will generally have priority over prior perfected security interests in the same inventory. In this scenario, AgriCorp has a prior perfected security interest in all of Farmer Giles’s farm equipment, including future equipment. Harvest Finance has a PMSI in a new combine harvester. For Harvest Finance to have priority over AgriCorp’s prior perfected security interest in the combine, it must have perfected its PMSI in the combine by filing a financing statement before or within a specified period after the debtor receives possession of the collateral, and, because it is inventory, it must also have provided the required notification to AgriCorp if AgriCorp had filed a financing statement covering the same collateral prior to Harvest Finance’s filing. Assuming Harvest Finance properly perfected its PMSI and provided the required notice to AgriCorp (as implied by the question seeking the correct priority outcome), its PMSI in the combine will have priority over AgriCorp’s general security interest in all farm equipment. This priority extends to the collateral covered by the PMSI, which is the new combine. Therefore, Harvest Finance would have priority regarding the combine.

The scenario involves a secured party, “Prairie Ag Services,” financing a farmer, Elias Vance, with a security interest in his crops and farm equipment. Prairie Ag Services properly filed a financing statement in Kansas. Elias later sells some of his harvested corn to “Midwest Grain Co.” in Nebraska, which is a buyer in the ordinary course of business. The core issue is whether Midwest Grain Co. takes the collateral free of Prairie Ag Services’ security interest. Under UCC § 9-320, a buyer in the ordinary course of business generally takes goods free of a security interest created by the seller even though the security interest is perfected and even though the buyer knows of its existence, unless the buyer knows that the sale is in ordinary course of the disposition of the collateral. In this case, Midwest Grain Co. is a buyer in the ordinary course of business. The sale of harvested crops is a common transaction for a farmer. There is no indication that Midwest Grain Co. knew the sale was not in the ordinary course of Elias Vance’s business. Therefore, Midwest Grain Co. takes the corn free of Prairie Ag Services’ security interest. The location of the filing (Kansas) and the buyer’s location (Nebraska) are relevant for perfection and choice of law, but the critical factor here is the buyer’s status as a buyer in the ordinary course of business and the nature of the transaction.

The core issue here revolves around the perfection of a security interest in a deposit account. Under Kansas UCC Article 9, a security interest in a deposit account can only be perfected by control. Control is established in one of three ways: (1) the secured party is the bank in which the deposit account is maintained; (2) the secured party has obtained the agreement of the bank in which the deposit account is maintained to comply with the secured party’s instructions directing disposition of the amounts in the deposit account without further consent by the debtor; or (3) the deposit account is a deposit account in which the secured party is the bank. In this scenario, AgriBank has a security interest in the deposit account held by First National Bank. AgriBank’s perfection hinges on whether it has control. AgriBank is not the bank where the deposit account is maintained. Therefore, to achieve control, AgriBank must have obtained First National Bank’s agreement to comply with AgriBank’s instructions. The security agreement between AgriBank and CropCo only grants AgriBank a security interest in the deposit account and does not, by itself, establish control. The UCC filing statement perfects security interests in most types of collateral but is ineffective for perfection in deposit accounts. Without First National Bank’s agreement to follow AgriBank’s instructions regarding the deposit account, AgriBank’s security interest remains unperfected. Therefore, AgriBank’s security interest in the deposit account is unperfected.

The core issue here revolves around the perfection of a security interest in a deposit account. Under Kansas UCC § 9-312(b), a security interest in a deposit account as original collateral can only be perfected by control. Control is defined in Kansas UCC § 9-104(a) and generally means the secured party is the bank where the deposit account is maintained, or the secured party has agreed with the bank that the bank will comply with instructions from the secured party directing disposition of the funds without the debtor’s consent. In this scenario, Sterling Bank filed a UCC-1 financing statement for the agricultural equipment and also has a security interest in the debtor’s deposit account at First National Bank. While the financing statement perfects the security interest in the equipment, it does not perfect the security interest in the deposit account. Perfection in the deposit account requires control. Since Sterling Bank did not obtain control over the deposit account at First National Bank, its security interest in the account remains unperfected. Therefore, when the debtor files for bankruptcy, the trustee, as a hypothetical bona fide purchaser for value and a lien creditor, will have priority over Sterling Bank’s unperfected security interest in the deposit account. This principle is fundamental to secured transactions law, emphasizing that the method of perfection must align with the type of collateral. Filing a financing statement is generally sufficient for tangible personal property and certain intangible rights, but deposit accounts require a different perfection method, namely control, to establish priority against third parties, including bankruptcy trustees.