In Idaho, as under the Uniform Commercial Code (UCC) Article 9, the perfection of a security interest in certain types of collateral, such as fixtures, requires more than just filing a financing statement. For fixtures, which are goods that have become so related to particular real property that an interest in them arises under real property law, a secured party must file a financing statement in the real property records. Specifically, Idaho Code Section 28-9-501(1)(a) and 28-9-502(b) outline the requirements for filing. The financing statement must reasonably describe the real property to which the collateral is or will become affixed. Furthermore, UCC § 9-501(a)(1) and § 9-515(d) of the UCC, which are adopted by Idaho, indicate that a fixture filing is effective for a period of twenty years from the date of filing, not the standard five years for most personal property security interests. This extended duration reflects the long-term nature of real estate interests. Therefore, a fixture filing in Idaho has a twenty-year effectiveness period.

The question probes the priority of a purchase money security interest (PMSI) in inventory against a prior perfected security interest in after-acquired inventory. Idaho law, like most jurisdictions adopting Article 9 of the UCC, provides specific rules for PMSI priority. For inventory, a PMSI holder must satisfy two primary requirements to achieve superpriority over a prior perfected secured party with a general security interest in after-acquired inventory. First, the PMSI must be perfected when the debtor receives possession of the inventory. Second, the PMSI holder must give an authenticated notification to any prior secured party who has a perfected security interest in inventory before the debtor receives possession of the inventory. This notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor, including after-acquired inventory. The timing of the notification is crucial; it must be sent before the debtor receives possession of the inventory. In this scenario, the notification was sent after the debtor received possession of the inventory. Therefore, the PMSI holder’s interest is subordinate to the prior perfected security interest. The calculation is conceptual: PMSI priority requires perfection upon receipt of inventory and notification to prior secured parties *before* receipt. Since notification occurred *after* receipt, the conditions for superpriority are not met.

In Idaho, when a secured party has a purchase money security interest (PMSI) in consumer goods, perfection is generally automatic under Idaho Code Section 28-9-309(1). However, this automatic perfection is subject to the buyer’s right to a certificate of title for the goods, as outlined in Idaho Code Section 28-9-311(1)(b). If the goods are of a type for which a certificate of title is required under Idaho law, perfection must be achieved by notation on the certificate of title. This requirement supersedes the automatic perfection rule for consumer goods. Therefore, even though a security interest in a refrigerator purchased by a consumer is a PMSI in consumer goods, if the refrigerator is considered a motor vehicle or other good requiring a certificate of title in Idaho, the secured party must ensure its interest is noted on the certificate of title to be perfected against third parties. The question posits a scenario where the secured party failed to note the interest on the certificate of title, and another creditor, a buyer in the ordinary course of business (BIOC), later acquires the collateral. A BIOC takes free of a security interest created by the seller, but not necessarily free of a security interest created by the buyer, unless that interest is unperfected. In this case, the failure to perfect by notation on the certificate of title renders the PMSI unperfected. Consequently, the subsequent creditor, assuming they are a buyer of the goods in the ordinary course of business and the goods are of a type requiring a certificate of title, would take the collateral free of the unperfected security interest.

The core issue here is the priority of security interests when a buyer in the ordinary course of business purchases collateral from a seller who is in the business of selling goods of that kind. Idaho Code Section 28-9-320, which mirrors UCC Section 9-320, provides that a buyer in the ordinary course of business takes free of a security interest created by the seller, even if the security interest is perfected and the buyer knows of its existence, unless the buyer knows that the sale is in violation of the security agreement. In this scenario, “AgriSolutions Inc.” is a secured party with a perfected security interest in “FarmFresh Produce LLC’s” inventory, which includes apples. “Orchard Harvest Distributors” is a buyer in the ordinary course of business because it purchases goods in the ordinary course from a person in the business of selling goods of that kind (apples). AgriSolutions’ security interest was created by FarmFresh, the seller. Orchard Harvest’s purchase of apples is a regular transaction for a produce distributor. There is no indication that Orchard Harvest knew the sale of apples was in violation of AgriSolutions’ security agreement. Therefore, Orchard Harvest takes the apples free of AgriSolutions’ security interest. The perfection of AgriSolutions’ security interest is irrelevant to the rights of a buyer in the ordinary course under this section. The fact that AgriSolutions filed a financing statement is a method of perfecting its security interest against other creditors and transferees, but it does not override the statutory protection afforded to buyers in the ordinary course.

The core issue here is determining the priority of security interests when a buyer in the ordinary course of business purchases collateral from a seller who has granted a security interest in that collateral to a lender. Under Idaho Code Section 28-9-320, a buyer in the ordinary course of business takes free of a security interest created by the seller, even if the security interest is perfected and even if the buyer knows of its existence, unless the buyer knows that the sale is in violation of the security agreement. This provision is designed to facilitate commerce by allowing ordinary course buyers to acquire goods without the burden of investigating the seller’s financing arrangements. In this scenario, “Agri-Harvest Solutions” is a buyer in the ordinary course of business because it regularly buys farm equipment from “Farmstead Equipment.” The purchase of the tractor was a regular transaction in the ordinary course of Farmstead Equipment’s business. Even though Agri-Harvest Solutions had knowledge that Farmstead Equipment had granted a security interest in its inventory to “Rural Lending Corp.,” this knowledge alone does not defeat its status as a buyer in the ordinary course of business. The exception would apply only if Agri-Harvest Solutions knew that the sale of the tractor was specifically in violation of the security agreement, which is not indicated in the facts. Therefore, Agri-Harvest Solutions takes the tractor free of Rural Lending Corp.’s security interest.

This question addresses the concept of perfection of a security interest in collateral that is subject to a certificate of title, specifically in the context of Idaho law. Under Idaho Code § 28-9-303, a security interest in goods covered by a certificate of title is generally perfected by compliance with the certificate of title statutes of the jurisdiction under whose certificate the goods are covered. Idaho Code § 49-509 outlines the requirements for noting a security interest on a certificate of title issued by Idaho. When a security interest is perfected in one jurisdiction and the collateral is subsequently brought into another jurisdiction, the perfection rules of the new jurisdiction apply after a certain period. Idaho Code § 28-9-316(d) provides that if a security interest perfected in one jurisdiction becomes subject to the law of another jurisdiction, the security interest remains perfected for a period of at most one year or until the expiration of the perfection in the original jurisdiction, whichever occurs first, if the security interest is not perfected in the new jurisdiction within that period. However, if the collateral is inventory or equipment that is used in more than one jurisdiction, or if the debtor is located in a different jurisdiction, different rules may apply. In this scenario, the vehicle, which is inventory for the dealership, is titled in Idaho. The security interest is perfected by notation on the Idaho certificate of title. When the vehicle is moved to Montana, and the debtor continues to operate the business there, the perfection in Idaho may lapse after a certain period if not re-perfected in Montana. Idaho law, following the UCC, generally allows for a grace period. However, since the collateral is inventory held by a dealer, and the dealer is now operating in Montana, the perfection in Idaho may not continue indefinitely without action in Montana. Idaho Code § 28-9-307(1) states that a buyer in the ordinary course of business of inventory takes free of a security interest created by the seller even if the security interest is perfected and the buyer has knowledge of the terms. This does not directly address perfection lapse but highlights the special treatment of inventory. The critical factor here is the lapse of perfection in the original jurisdiction (Idaho) when the collateral becomes subject to the law of another jurisdiction (Montana) and the debtor’s business operations shift. Idaho Code § 28-9-316(c) addresses this by stating that a security interest perfected in a jurisdiction becomes unperfected and is deemed to have been unperfected when the security interest becomes subject to the law of the second jurisdiction, and the security interest is not perfected under the law of the second jurisdiction before the expiration of the time provided in § 28-9-316(b) or § 28-9-316(d). Given that the vehicle is inventory and the dealership’s operations have shifted to Montana, the security interest perfected in Idaho would generally cease to be perfected in Idaho once it becomes subject to Montana law and is not re-perfected in Montana. The most accurate outcome is that the security interest becomes unperfected in Idaho after the expiration of the perfection period under Idaho law, as it is now subject to Montana law.

The scenario involves a purchase money security interest (PMSI) in equipment. Under Idaho Code Section 28-9-324, a PMSI in equipment has priority over a conflicting security interest in the same equipment if the PMSI is perfected by filing no later than 20 days after the debtor receives possession of the collateral. In this case, Aurora Corp. filed its financing statement on October 25th. The debtor, Summit Enterprises, received possession of the specialized drilling equipment on October 10th. The 20-day period begins on October 10th. Counting 20 days from October 10th, the deadline for perfection to maintain PMSI priority is October 30th. Aurora Corp.’s filing on October 25th falls within this 20-day window. Therefore, Aurora Corp.’s PMSI in the drilling equipment is perfected on time and has priority over the earlier, unperfected security interest held by Pioneer Bank. The key concept is the specific grace period for PMSI perfection in equipment under Idaho law, which is distinct from the general 20-day period for PMSIs in inventory or consumer goods.

In Idaho, when a secured party has a perfected security interest in collateral, and that collateral is sold in a transaction not authorized by the secured party, the secured party’s rights generally follow the collateral. Article 9 of the Uniform Commercial Code, as adopted in Idaho, addresses the disposition of collateral and the rights of a secured party. Specifically, Idaho Code § 28-9-315(1)(a) states that a security interest continues in collateral notwithstanding sale, lease, license, or other disposition thereof unless the secured party authorized the disposition free of the security interest. This means that if a buyer of collateral purchases it from a debtor who is not an authorized dealer and the secured party has a perfected security interest, the buyer generally takes the collateral subject to that security interest. The secured party’s perfection is maintained against the buyer unless the buyer qualifies as a buyer in the ordinary course of business from a seller engaged in the business of selling goods of that kind, and even then, the buyer takes free only if the secured party authorized the disposition. In this scenario, the farm equipment is collateral for a loan from AgriBank, and AgriBank has a perfected security interest. If the farmer sells the combine to another farmer, who is not a dealer in farm equipment, and AgriBank did not authorize this sale free of its security interest, AgriBank’s perfected security interest in the combine continues in the hands of the buyer. Therefore, AgriBank can repossess the combine from the buyer to satisfy the outstanding debt.

The question concerns the priority of security interests in a mixed collateral situation, specifically when a security interest attaches to both tangible goods and intangible rights. In Idaho, as under general Article 9 of the Uniform Commercial Code, perfection of a security interest is generally achieved through filing a financing statement. However, for certain types of collateral, such as accounts, a filing is the exclusive method of perfection. When a security agreement covers both goods and accounts that arise from the sale of those goods, the secured party must take appropriate steps to perfect its interest in each type of collateral. For accounts, this means filing a financing statement. For goods, perfection might be through filing or possession, depending on the type of goods. If a secured party perfects its interest in accounts by filing a financing statement that adequately describes the accounts, and later a competing interest arises in those same accounts, the initial secured party’s perfected interest will generally have priority. This is because perfection establishes the secured party’s rights against subsequent creditors. The fact that the accounts arise from the sale of inventory does not change the perfection requirements for the accounts themselves. Therefore, the initial secured party’s filing for the accounts is the critical step for establishing priority in those accounts.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Idaho Code § 28-9-324, a PMSI in inventory has priority over a conflicting security interest in the same inventory, provided certain conditions are met. For a PMSI in inventory to have priority, the secured party must have perfected its security interest by filing a financing statement before the debtor receives possession of the inventory. Additionally, the PMSI creditor must give notification in accordance with Idaho Code § 28-9-324(b) to any secured party who has filed a financing statement covering the goods in which the PMSI debtor has security interests. This notification must be sent before the debtor receives possession of the inventory, and it must state that the sender has or expects to acquire a PMSI in inventory of a described type. In this case, “AgriBank” has a prior perfected security interest in all of “Farmstead Produce’s” existing and after-acquired inventory. “SeedCo” has a PMSI in the new seed inventory delivered to Farmstead Produce. For SeedCo’s PMSI to have priority over AgriBank’s prior perfected security interest, SeedCo must have filed its financing statement before Farmstead Produce received the seed inventory and must have sent the required notification to AgriBank prior to Farmstead Produce receiving the inventory. Since SeedCo’s filing and notification occurred *after* Farmstead Produce received the seed inventory, SeedCo’s PMSI will not have priority over AgriBank’s existing security interest. Therefore, AgriBank’s prior perfected security interest will prevail.

The scenario involves a dispute over priority between a purchase money security interest (PMSI) and a prior perfected security interest. In Idaho, as under Article 9 of the UCC, a PMSI generally 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 a specified period thereafter. For inventory, the PMSI holder must perfect its interest and, if the debtor is to receive possession of the inventory, the PMSI holder must also give notification to any other secured party whose security interest was perfected prior to the filing of the PMSI, and that other secured party must have knowledge of the PMSI. This notification must be sent before the debtor receives possession of the inventory. Idaho Code § 28-9-324(b) outlines the requirements for PMSI priority in inventory. Specifically, for a PMSI in inventory to have priority over a prior perfected security interest, the PMSI must be perfected by filing, and the PMSI holder must give the required notification to the prior secured party. The notification must be in writing and identify the goods by item or bulk. The notification must be sent before the debtor receives possession of the inventory. In this case, the initial financing statement filed by “SecureLend Corp.” perfected its security interest in all of “FarmFresh Produce LLC’s” existing and future inventory. “AgriFinance Solutions” later acquired a PMSI in FarmFresh’s new inventory. To maintain priority, AgriFinance Solutions needed to perfect its PMSI and notify SecureLend Corp. before FarmFresh received the new inventory. The facts state AgriFinance Solutions filed its financing statement on July 1st and notified SecureLend Corp. on July 3rd, after FarmFresh had already received the new inventory on July 2nd. This timing is critical. Because the notification was sent after FarmFresh took possession of the inventory, AgriFinance Solutions fails to meet the statutory requirement for PMSI priority over the previously perfected security interest of SecureLend Corp. Therefore, SecureLend Corp.’s prior perfected security interest has priority.

The question pertains to the perfection of security interests in fixtures under Idaho’s Uniform Commercial Code, specifically Article 9. Perfection of a security interest in fixtures requires filing a fixture filing in the real property records. This fixture filing must meet the requirements of UCC § 9-502, which includes identifying the debtor, the secured party, and the collateral. Crucially, for a fixture filing, the financing statement must also “indica[te] that it is a fixture filing” and provide a “description of the real property sufficient to identify it.” Idaho Code § 28-9-502(b)(3) specifies that the description of the real property must be sufficient to identify it, which generally means providing the address or a legal description. A financing statement filed only in the general UCC filing system, without the specific fixture filing requirements, would not perfect a security interest in fixtures against subsequent purchasers of the real property. Therefore, filing a standard UCC-1 financing statement with the Idaho Secretary of State, even if it describes the collateral as “all equipment located at 123 Main Street, Boise, Idaho,” would not constitute a proper fixture filing. Perfection against a subsequent real property encumbrancer or purchaser of the real property requires filing in the real property records of the county where the real estate is located.

The core issue here is the perfection of a security interest in a deposit account. Under Idaho Code § 28-9-301(1)(a), a security interest in a deposit account can only be perfected by control. Idaho Code § 28-9-104(1) defines control over a deposit account as occurring when the secured party is the bank with which the deposit account is maintained, or when the secured party obtains the agreement of the bank with which the deposit account is maintained to comply with the secured party’s instructions concerning the balance in the deposit account, or when the secured party becomes the assignee of the deposit account. In this scenario, AgriBank has a security interest in the deposit account held at First National Bank. AgriBank has not become the bank with which the account is maintained, nor has it obtained First National Bank’s agreement to comply with its instructions. Instead, AgriBank has filed a UCC-1 financing statement. Filing is the method of perfection for most types of collateral, including general intangibles and accounts, but it is not effective for perfection in deposit accounts. Therefore, AgriBank’s security interest in the deposit account is unperfected.

The core issue here is determining the priority of competing security interests in collateral. In Idaho, as under the Uniform Commercial Code (UCC) Article 9, a perfected security interest generally has priority over an unperfected security interest. Perfection is typically achieved by filing a financing statement. However, if a security interest is granted in goods that are already subject to a security interest, and the new secured party knows of the prior interest, the priority rules can be more complex. In this scenario, AgriCorp has a perfected security interest in the farm equipment. When Valley Bank takes a security interest in the same equipment as collateral for a new loan to Farmer Giles, it must take steps to perfect its interest. If Valley Bank files its financing statement *after* AgriCorp’s interest is perfected, AgriCorp’s perfected interest will generally have priority. However, the question implies Valley Bank may have had knowledge of AgriCorp’s prior interest. Idaho Code § 28-9-322 outlines the general rules for priority. A perfected security interest has priority over an unperfected one. Between two perfected security interests, the first to file or perfect has priority. Here, AgriCorp’s interest is perfected. Valley Bank’s interest is taken later. If Valley Bank files its financing statement, it will be perfected. The critical factor is whether Valley Bank’s knowledge of AgriCorp’s prior perfected security interest affects its priority. UCC § 9-322(a)(1) states that the first-to-file or first-to-perfect rule applies. There isn’t a specific exception in Article 9 that subordinates a later perfected interest to an earlier perfected interest simply because the later secured party had knowledge of the prior one, unless it falls under specific purchase money security interest (PMSI) rules or other exceptions not presented here. Therefore, assuming AgriCorp’s security interest was perfected prior to Valley Bank taking its security interest and filing its financing statement, AgriCorp’s perfected security interest will have priority over Valley Bank’s subsequently perfected security interest. The knowledge of Valley Bank is not a disqualifier for its perfection, but rather the timing of perfection relative to AgriCorp’s perfected interest.

The question pertains to the perfection of a security interest in collateral that is likely to be reclassified as general intangibles under Idaho’s UCC Article 9. When a debtor grants a security interest in a broad category of assets, and a portion of those assets later fall under a more specific classification for perfection purposes, the secured party must ensure their initial filing reflects the appropriate classification. In this scenario, the debtor initially grants a security interest in “all of its present and future intellectual property.” This broad description would typically encompass copyrights, patents, and trademarks. However, for perfection purposes under Idaho UCC § 9-301 and § 9-309, copyrights are considered “general intangibles” unless they are copyrights in which the United States copyright office has registered a copyright. Trademarks are also generally treated as general intangibles. Patents are also generally treated as general intangibles. If the collateral later evolves or is specifically identified as copyrights that have been registered with the U.S. Copyright Office, perfection for those specific copyrights requires filing a notice of a security interest with the U.S. Copyright Office, as per § 9-309(3). A UCC-1 financing statement filed in the state of Idaho would perfect a security interest in general intangibles, but it would not be effective for registered copyrights. Therefore, if the debtor’s intellectual property portfolio develops to include registered copyrights, the secured party must file a separate notice of its security interest with the U.S. Copyright Office to maintain perfection as to those specific assets. The initial filing of a UCC-1 in Idaho is effective for general intangibles, which would cover unregistered copyrights and potentially other forms of intellectual property not subject to federal registration for perfection. However, to ensure perfection over registered copyrights, the federal filing is paramount.

The core issue here is determining when a security interest in a vehicle, which is also subject to a certificate of title, is perfected under Idaho law. Idaho, like many states, has a dual system for perfecting security interests: Article 9 of the UCC and state certificate of title statutes. Idaho Code § 49-524 governs the perfection of security interests in vehicles requiring a certificate of title. Perfection of a security interest in a vehicle that requires a certificate of title is generally accomplished by noting the security interest on the certificate of title and delivering the certificate to the designated state office for recording, not by filing a UCC-1 financing statement. While a UCC-1 filing is the standard method for perfecting security interests in most goods, vehicles subject to title registration are an exception. The UCC explicitly defers to certificate of title statutes for perfection of such interests, as found in Idaho Code § 28-9-311(a)(2). Therefore, even though Big Sky Bank filed a UCC-1 financing statement, this filing does not perfect its security interest in the tractor. Perfection would require the security interest to be noted on the tractor’s certificate of title. Because Big Sky Bank failed to perfect its security interest by notation on the title, its unperfected security interest is subordinate to the perfected security interest of Riverfront Capital, which properly noted its lien on the certificate of title.

This question tests the understanding of perfection and priority rules concerning purchase money security interests (PMSIs) in inventory under Idaho’s Uniform Commercial Code (UCC) Article 9. Specifically, it examines the requirements for a PMSI holder in inventory to achieve superpriority over a prior-perfected secured party with a general security interest in after-acquired inventory. Idaho UCC § 9-324(b) outlines these requirements. A PMSI in inventory is perfected when it attaches and the secured party gives new value to enable the debtor to acquire the inventory. To maintain superpriority over a prior perfected secured party with a security interest in after-acquired inventory, the PMSI creditor must, at the time the debtor receives possession of the inventory, have a perfected security interest in the inventory and send an authenticated notification to any prior secured party whose security interest covers the inventory. This notification must state that the PMSI creditor expects to acquire a PMSI in inventory of the debtor, including after-acquired inventory. The notification must be sent within a specific timeframe before the debtor receives possession of the inventory. In this scenario, the prior secured party, “AgriBank,” has a perfected security interest in all of “Farmstead Orchards'” inventory, including after-acquired inventory. “Harvest Finance” provides a loan to Farmstead Orchards specifically to acquire new apple crops, creating a PMSI in that inventory. For Harvest Finance’s PMSI to have priority over AgriBank’s prior perfected security interest in the same inventory, Harvest Finance must have perfected its security interest and sent the required notification to AgriBank before Farmstead Orchards received possession of the new apple crops. The notification is a critical step for superpriority in inventory PMSIs. Without the proper notification, Harvest Finance’s PMSI would generally be subordinate to AgriBank’s earlier perfected security interest. The notification must be authenticated and sent within a reasonable time before the debtor receives possession. The scenario specifies that Harvest Finance sent the notification two days before delivery. This timeframe is generally considered reasonable under UCC § 9-324(b). Therefore, Harvest Finance’s PMSI has priority.

The core issue here revolves around the perfection of a security interest in accounts. Under Idaho Code § 28-9-301, a security interest in accounts is generally perfected by filing a financing statement. However, there is an exception for certain “choses in action” that are not accounts. Idaho Code § 28-9-102(1)(b) defines “account” broadly to include a right to payment for goods sold or leased or for services rendered. A general intangible, on the other hand, is a residual category for personal property that is not goods, chattel paper, documents, instruments, investment property, letters of credit, or deposit accounts. In this scenario, the agreement between Northstar Logging and Cascade Timber involves the sale of timber, which would generate rights to payment. These rights to payment for goods sold are precisely what the definition of “account” encompasses. Therefore, the security interest in these rights to payment is in accounts. Perfection for accounts requires filing a financing statement in accordance with Idaho Code § 28-9-310(1). The fact that Cascade Timber is a sole proprietorship and the amount is less than \$5,000 does not create an exception to the filing requirement for accounts under Idaho law. While there are automatic perfection rules for certain consumer goods transactions or isolated assignments of accounts, this transaction involves a commercial entity and a sale of goods, making it subject to the general filing rules for accounts. Consequently, without a filed financing statement, Northstar Logging’s security interest is unperfected against a subsequent party who might acquire rights in those accounts, such as a judgment lien creditor or a buyer in the ordinary course of business. The prompt asks about the *method* of perfection, which is filing.

No calculation is required for this question as it tests conceptual understanding of the priority rules in secured transactions. In Idaho, as governed by Article 9 of the Uniform Commercial Code, the general rule for determining priority among competing secured parties is the “first to file or perfect” rule. This means that a secured party who has properly filed a financing statement or otherwise perfected their security interest will generally have priority over a secured party who has not yet filed or perfected. However, there are several exceptions and nuances to this rule. One significant exception pertains to purchase-money security interests (PMSIs). A PMSI in goods, other than inventory, has priority over a conflicting security interest in the same goods if the PMSI is perfected within a specified period after the debtor receives possession of the goods. For inventory, a PMSI generally has priority over a conflicting security interest if it is perfected before the debtor receives possession of the inventory and the secured party gives the required notification to any other secured party who has filed a financing statement covering the inventory. The scenario presented involves a PMSI in equipment. Under Idaho UCC § 9-324(a), a PMSI in goods other than inventory or livestock has priority over a conflicting security interest in the same goods if the PMSI is perfected by filing no later than twenty days after the debtor receives possession of the collateral. Therefore, if the lender files their financing statement within this twenty-day window, their PMSI in the specialized drilling equipment will take priority over the prior perfected security interest held by the equipment leasing company, despite the earlier filing by the leasing company. The key is the timely perfection of the PMSI.

In Idaho, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in a deposit account as original collateral is achieved by control. Section 9-314(a) of the UCC, as adopted in Idaho, states that a security interest is perfected when the secured party obtains control over the deposit account. Control is defined in Section 9-104. For a deposit account, control is typically established when the secured party is the bank with which the deposit account is maintained, or when the debtor has agreed in writing that the bank will comply with the secured party’s instructions regarding the account (a “tri-party control agreement”). A mere pledge of the account, without the bank’s acknowledgment or the secured party’s ability to direct the disposition of the funds, does not constitute control. Therefore, even if the debtor grants a security interest in the account and delivers the passbook, perfection is not achieved unless control, as defined by the UCC, is established.

This question pertains to the priority of security interests under Article 9 of the Uniform Commercial Code, as adopted in Idaho. Specifically, it addresses the priority between a perfected purchase-money security interest (PMSI) in equipment and a prior perfected security interest in after-acquired equipment. A PMSI generally has priority over other security interests in the collateral, provided certain conditions are met. For equipment, the secured party must perfect its security interest in the equipment not later than twenty days after the debtor receives possession of the collateral. Idaho Code § 28-9-324(a) outlines the requirements for PMSI priority in goods other than inventory and letter-of-credit rights. It states that a PMSI in goods other than inventory or letter-of-credit rights has priority over a conflicting security interest in the same goods if the PMSI is perfected when the debtor receives possession of the collateral or within a specified grace period. In this scenario, Sterling Equipment Finance perfected its PMSI on May 15th, which was after the debtor, Boise Builders Inc., received possession of the new excavators on May 1st. This perfection occurred on the 14th day after possession, which falls within the twenty-day grace period provided by Idaho law. Therefore, Sterling Equipment Finance’s PMSI is perfected in a timely manner. The prior security interest held by Gem State Bank was perfected on April 10th, covering all equipment, including after-acquired equipment. However, a PMSI perfected within the statutory period generally takes priority over a previously perfected security interest in after-acquired collateral. Thus, Sterling Equipment Finance’s perfected PMSI in the excavators will have priority over Gem State Bank’s earlier perfected security interest in after-acquired equipment.

The core issue in this scenario revolves around the perfection of a security interest in a deposit account. Under Idaho Secured Transactions Article 9, specifically Idaho Code § 28-9-309(2), a security interest in a deposit account as original collateral can only be perfected by control. Control is defined in Idaho Code § 28-9-104. For a deposit account, control is achieved when the secured party is the bank in which the deposit account is maintained, or when the secured party obtains the agreement of the bank with which the deposit account is maintained, or when the secured party becomes the assignee of the deposit account. In this case, AgriBank has a perfected security interest in the borrower’s general deposit account because it is the bank where the account is maintained, thus satisfying the control requirement for perfection. The filing of a financing statement, while generally required for perfection of security interests in most types of collateral, is explicitly stated as not being necessary for perfection of a security interest in a deposit account as original collateral under Idaho Code § 28-9-309(2). Therefore, AgriBank’s security interest is perfected solely by virtue of its control over the deposit account.

The scenario involves a secured party, “Alpine Outfitters,” who has a security interest in inventory owned by “Boise Bikes.” Boise Bikes subsequently files for bankruptcy. In Idaho, as in most jurisdictions following Article 9 of the Uniform Commercial Code, a perfected security interest generally has priority over unsecured creditors and most other claims in bankruptcy proceedings. Perfection is typically achieved by filing a financing statement. If Alpine Outfitters properly perfected its security interest in the inventory before Boise Bikes filed for bankruptcy, its security interest would survive the bankruptcy and allow Alpine Outfitters to repossess and sell the collateral. The Idaho Secured Transactions law, mirroring UCC Article 9, emphasizes the importance of perfection for establishing priority. Unperfected security interests are vulnerable to claims by a bankruptcy trustee, who acts as a hypothetical lien creditor under federal bankruptcy law, often taking priority over unperfected secured parties. Therefore, the key to Alpine Outfitters’ ability to recover the inventory lies in the perfection status of its security interest prior to the bankruptcy filing. If perfection occurred, Alpine Outfitters would have a secured claim against the inventory. If it did not, the trustee could avoid the unperfected security interest.

The scenario involves a secured party, “Mountain View Equipment Finance” (MVEF), which has a perfected security interest in inventory and accounts receivable of “Boise Builders Supply” (BBS). BBS defaults on its loan. A subsequent lender, “Canyon Creek Bank” (CCB), attempts to secure its interest in the same collateral. For CCB to have priority over MVEF’s previously perfected security interest in the inventory and accounts receivable, CCB would typically need to satisfy certain conditions under Article 9 of the Uniform Commercial Code, as adopted in Idaho. Specifically, under Idaho Code § 28-9-324, a buyer of inventory takes free of a security interest if the buyer buys in ordinary course of business, without knowledge that the sale is in violation of the security agreement, and the security interest is perfected by a filed financing statement. However, this question pertains to a competing secured party, not a buyer. In the context of competing secured parties, priority is generally determined by the first to file or first to perfect rule, as per Idaho Code § 28-9-322. MVEF has a perfected security interest. For CCB to gain priority over MVEF’s existing perfected security interest in the inventory and accounts receivable, CCB would need to have its security interest perfected *before* MVEF’s. Alternatively, if MVEF’s security interest was not perfected, CCB could gain priority by perfecting its own security interest. However, the problem states MVEF has a perfected security interest. A purchase-money security interest (PMSI) in inventory has special priority rules. Under Idaho Code § 28-9-324(b), a PMSI in inventory has priority over a conflicting security interest in the same inventory if, among other things, the PMSI lender gives notification to the holder of the conflicting security interest before the debtor receives possession of the inventory. However, the question does not state that CCB has a PMSI. Given that MVEF has a perfected security interest in both inventory and accounts receivable, and CCB is a subsequent secured party seeking priority in the same collateral, CCB’s priority will depend on its own perfection status relative to MVEF’s. If CCB also perfects its security interest, the general rule of first-to-file or first-to-perfect applies. Since MVEF is stated to have a perfected security interest, CCB would need to perfect its interest *before* MVEF or qualify for a specific exception. Without a PMSI or some other specific statutory priority, CCB would generally be subordinate to MVEF’s perfected security interest. The question asks about CCB’s ability to gain priority. The most direct way for a subsequent secured party to gain priority over a prior perfected security interest in the same collateral, absent a PMSI or other special rule, is to have its own security interest perfected *before* the prior secured party. Therefore, if CCB perfected its security interest in the inventory and accounts receivable on March 15th, and MVEF’s perfection predates this, CCB would not have priority. However, if MVEF’s perfection occurred *after* March 15th, CCB would have priority. The question is framed to test the understanding of when a subsequent secured party can gain priority. The most straightforward scenario for CCB to achieve priority is if its perfection occurred before MVEF’s. Let’s assume MVEF perfected its security interest on January 10th. CCB then perfects its security interest on March 15th. In this case, MVEF has priority because it perfected first. The question asks what CCB must do to gain priority. The correct answer is that CCB must have perfected its security interest in the inventory and accounts receivable on or before January 10th. This is because priority is generally determined by the first to perfect rule. If MVEF perfected on January 10th, and CCB perfected on March 15th, MVEF has priority. For CCB to have priority, its perfection must have occurred on or before January 10th.

The core issue here revolves around the perfection of a security interest in a cooperative housing unit under Idaho law, specifically as it relates to Article 9 of the Uniform Commercial Code (UCC). Idaho, like many states, has specific rules for perfection of security interests in cooperative interests. Idaho Code § 28-9-102(1)(a) defines a “cooperative interest” as an interest in a cooperative housing corporation, which includes the right to possess and occupy a unit. Idaho Code § 28-9-301(1)(d) and § 28-9-301(2) specify that a security interest in a cooperative interest is perfected when a financing statement is filed in the real property records of the county where the unit is located, and the secured party receives a possession statement from the cooperative housing corporation. The question presents a scenario where a lender files a UCC-1 financing statement with the Idaho Secretary of State, which is the correct place for perfection of most personal property security interests, but not for cooperative interests. The security interest in a cooperative interest is considered an interest in real property for perfection purposes. Therefore, filing with the Secretary of State is insufficient to perfect the security interest against a subsequent buyer of the cooperative interest who has notice of the security interest. The proper method, as outlined by Idaho law, involves filing in the real property records and obtaining a possession statement. Without this proper filing, the lender’s security interest is unperfected against a subsequent purchaser for value without knowledge of the security interest.

The core issue here is the priority of security interests when collateral is transferred. Idaho law, following UCC Article 9, generally provides that a buyer of goods takes free of a security interest created by the seller if the buyer is a buyer in ordinary course of business (BIOC), unless the buyer knows the sale is outside the ordinary course of business. A BIOC is defined as a person that buys goods in good faith, without knowledge that the sale violates the rights of the secured party or other person, and buys in ordinary course from a person in the business of selling goods of that kind. In this scenario, the Idaho Department of Agriculture has a perfected security interest in all of Farmer McGregor’s farm equipment. Farmer McGregor sells a tractor to Agnes, who operates a small hobby farm and purchases the tractor for personal use. Agnes is not in the business of selling farm equipment. She buys the tractor in good faith and without knowledge of the security interest. The sale is to a person not in the business of selling farm equipment, making her not a buyer in ordinary course of business under Idaho Code § 28-9-102(a)(9). Therefore, Agnes takes the collateral subject to the security interest. The security interest remains attached to the tractor.

This scenario involves a purchase money security interest (PMSI) in equipment and the priority rules under Idaho Secured Transactions Law, specifically Article 9 of the Uniform Commercial Code. A PMSI grants the secured party priority over other creditors if certain steps are taken. In this case, AgriCorp financed the purchase of specialized harvesting machinery for Farmer Giles. AgriCorp properly perfected its security interest by filing a financing statement before Farmer Giles took possession of the equipment. Subsequently, Regional Bank, which had a prior blanket security interest in all of Farmer Giles’s existing and after-acquired equipment, also filed a financing statement. Under Idaho Code § 28-9-324, a PMSI in equipment generally has priority over a conflicting security interest in the same equipment if the PMSI is perfected when the debtor receives possession of the collateral or within a certain timeframe. Since AgriCorp filed its financing statement before or at the time Farmer Giles received possession, its PMSI in the harvesting machinery primes Regional Bank’s earlier-filed blanket lien on that specific equipment. The fact that Regional Bank had a prior security interest in after-acquired property does not defeat a properly perfected PMSI in new equipment acquired by the debtor. The key is the timely perfection of the PMSI.

This scenario involves determining the priority of a security interest in after-acquired property under Idaho’s Uniform Commercial Code Article 9. The core issue is whether the lender’s security interest in “all inventory, now owned or hereafter acquired” attaches to the specific inventory purchased by the debtor after the filing of a financing statement. Under Idaho UCC § 9-204, a security agreement may create or provide for a security interest in after-acquired property. For a security interest to be perfected, a financing statement must have been filed. The lender, “Valley Bank,” filed a financing statement covering “all inventory” on January 15, 2023. The debtor, “Mountain Gear Co.,” then purchased new inventory from “Summit Supplies” on March 10, 2023. Summit Supplies did not file a financing statement. Valley Bank’s security interest in the inventory acquired by Mountain Gear Co. on March 10, 2023, attached and was perfected upon filing its financing statement, provided the security agreement included after-acquired inventory. Since Summit Supplies did not file a financing statement, its interest, if any, would be unperfected. Therefore, Valley Bank’s perfected security interest in the after-acquired inventory has priority. The question asks about the status of Valley Bank’s security interest in the inventory acquired on March 10, 2023. Because Valley Bank properly filed a financing statement covering inventory, including after-acquired inventory, its security interest attaches to this new inventory and is perfected.

The question revolves around the priority of security interests when a debtor defaults on multiple secured loans. In Idaho, as under the Uniform Commercial Code (UCC) Article 9, the general rule for priority among competing secured parties is “first in time, first in right,” which is determined by the order of filing a financing statement or perfection by other means. However, there are exceptions, particularly concerning purchase money security interests (PMSIs). A PMSI in inventory has superpriority over other security interests in the same inventory, provided certain conditions are met. These conditions, as outlined in UCC § 9-324 and Idaho’s adoption of it, include that the PMSI creditor must have perfected its interest by filing a financing statement and that the other secured party must have received notification of the PMSI before the debtor receives possession of the inventory. In this scenario, AgriBank has a perfected security interest in all of Farmer Giles’s existing and future farm equipment. This perfection occurred on January 15, 2023. CropCo later obtains a PMSI in a new combine harvester purchased by Farmer Giles, which is considered equipment. CropCo perfects its PMSI by filing on March 1, 2023. The critical element for CropCo’s superpriority is whether AgriBank received notification of CropCo’s PMSI before Farmer Giles received possession of the combine. The problem states that CropCo sent a notification letter to AgriBank on February 15, 2023, and Farmer Giles took possession of the combine on February 20, 2023. Since CropCo’s notification to AgriBank occurred before Farmer Giles took possession, and CropCo’s PMSI was perfected by filing, CropCo’s security interest in the combine has priority over AgriBank’s earlier perfected security interest in after-acquired equipment. Therefore, CropCo would be entitled to the proceeds from the sale of the combine, up to the amount of its outstanding PMSI.

In Idaho, when a secured party has a perfected security interest in collateral and that collateral is sold, exchanged, or otherwise disposed of in a transaction not authorized by the secured party, the security interest generally continues in the collateral under Idaho Code Section 28-9-315(a)(1). This principle is known as the “continuing perfection” rule. However, there is an exception for buyers in the ordinary course of business under Idaho Code Section 28-9-320(a). A buyer in the ordinary course of business, taking free of a security interest created by the seller, even if the security interest is perfected and the buyer knows of its existence, unless the buyer knows that the sale is in violation of the security agreement. In this scenario, Ms. Anya is a buyer in the ordinary course of business purchasing inventory from the dealership, “Wheels & Deals.” The security interest held by “First National Bank of Boise” is perfected in the inventory. Since Ms. Anya is buying inventory in the ordinary course of business from a merchant dealing in goods of that kind, her interest generally takes priority over the bank’s security interest. Therefore, the bank’s security interest is likely terminated as to the specific vehicle purchased by Ms. Anya.