In Montana, under Article 9 of the Uniform Commercial Code, a purchase money security interest (PMSI) in consumer goods generally attains automatic perfection upon attachment. This means the secured party does not need to file a financing statement or take possession of the collateral to establish priority against most other creditors. However, this automatic perfection is subject to certain limitations and exceptions. One crucial aspect is the interaction with other perfected security interests. While a PMSI in consumer goods is automatically perfected, a subsequent buyer of those goods who buys for value, receives delivery, and has knowledge only of the secured party’s security interest, takes the collateral free of that automatically perfected security interest. This is a buyer in the ordinary course of business exception, but specifically for consumer goods. The key here is that the buyer must purchase for value and receive delivery, and crucially, not have knowledge of the security interest. If the secured party has filed a financing statement, then a subsequent buyer, even one for value and delivery, would be on notice and the security interest would remain perfected against them. The scenario describes a PMSI in a television granted to Glacier Electronics. Glacier Electronics did not file a financing statement. Subsequently, Ms. Albright purchases the television from the original debtor, Mr. Henderson, who is a consumer. Ms. Albright pays value and takes possession of the television. The question hinges on whether her purchase cuts off Glacier Electronics’ automatically perfected PMSI. Since Mr. Henderson is a consumer and the television is a consumer good, Glacier Electronics’ PMSI was automatically perfected upon attachment. However, Ms. Albright is a buyer of consumer goods from a consumer debtor. Montana UCC § 9-320(b) states that a buyer of goods that are consumer goods, other than a buyer of a motor vehicle that is collateral for which a certificate of title is required under Montana law, takes free of a security interest even if perfected if the buyer has no knowledge of the security interest, gives value, and receives delivery of the collateral. Since Ms. Albright purchased the television for value, received delivery, and the facts do not state she had knowledge of Glacier Electronics’ security interest, her purchase cuts off Glacier Electronics’ automatically perfected PMSI. Therefore, Glacier Electronics’ security interest is extinguished.

The scenario involves a debtor, “Big Sky Lumber Inc.”, located in Montana, granting a security interest in its inventory to “Frontier Bank”. Frontier Bank properly files a financing statement in Montana. Subsequently, Big Sky Lumber Inc. ships a portion of its inventory to a buyer in Wyoming. The buyer in Wyoming, “Prairie Timber Sales LLC”, does not have actual knowledge of Frontier Bank’s security interest. Montana’s Article 9, like the UCC generally, prioritizes perfection of security interests. For inventory, perfection is achieved by filing. The key issue here is the effect of the sale of inventory in Wyoming on the secured party’s (Frontier Bank’s) rights. Under UCC § 9-320, a buyer in ordinary course of business (BIOC) takes free of a security interest created by its seller, even if the security interest is perfected, unless the buyer has knowledge of the security interest. Prairie Timber Sales LLC is a buyer of inventory in the ordinary course of business from Big Sky Lumber Inc., a person in the business of selling goods of that kind. There is no indication that Prairie Timber Sales LLC had actual knowledge of Frontier Bank’s security interest. Therefore, Prairie Timber Sales LLC takes the inventory free of Frontier Bank’s security interest. The perfection of the security interest in Montana is relevant to priority disputes between secured parties or between a secured party and a lien creditor, but it does not prevent a BIOC from taking free of the security interest. The Uniform Commercial Code’s policy is to facilitate commerce by allowing ordinary course buyers to purchase goods without the burden of investigating perfection records for every transaction. Montana has adopted the UCC with its standard provisions on this matter.

The scenario involves a dispute over priority between a purchase money security interest (PMSI) in inventory and a prior perfected security interest in after-acquired inventory. In Montana, as under the Uniform Commercial Code (UCC) Article 9, a PMSI holder in inventory generally has priority over a prior perfected secured party, provided certain notification requirements are met. Specifically, under Montana Code Annotated (MCA) § 30-9A-324(b), a PMSI in inventory has priority over a conflicting security interest in the same inventory if the PMSI holder meets three conditions: (1) the PMSI is perfected when the debtor receives possession of the inventory; (2) the PMSI holder gives an authenticated notification to the holder of the conflicting security interest before the debtor receives possession of the inventory; and (3) the notification states that the person giving the notification has or expects to acquire a PMSI in inventory of a described type. The prior secured party, Big Sky Bank, perfected its security interest in all of “Durable Goods Inc.’s” inventory, including after-acquired inventory, on January 15th. Glacier Finance, the PMSI holder, perfected its security interest in the specific widgets on February 1st. For Glacier Finance to have priority over Big Sky Bank’s earlier perfected security interest in the same inventory, it must have satisfied the notification requirements of MCA § 30-9A-324(b). Since Glacier Finance failed to provide any notification to Big Sky Bank before Durable Goods Inc. received possession of the widgets, its PMSI is subordinate to Big Sky Bank’s prior perfected security interest. Therefore, Big Sky Bank has priority.

The scenario describes a purchase money security interest (PMSI) in inventory. Under Montana’s version of UCC Article 9, specifically MCA § 30-9A-324, a PMSI holder in inventory can maintain priority over a prior secured party if certain conditions are met. The prior secured party, Glacier National Bank, has a perfected security interest in all of Big Sky Outfitters’ inventory. The new secured party, Mountain State Finance, is providing financing for Big Sky Outfitters’ purchase of new ski equipment, which constitutes inventory. For Mountain State Finance to have priority over Glacier National Bank with respect to this new inventory, it must satisfy the requirements of MCA § 30-9A-324(b). These requirements include: 1) perfecting its security interest in the inventory, and 2) giving the required notification to any secured party or lienholder who has previously filed a financing statement covering the same type of inventory or has previously filed a financing statement covering the collateral. The notification must be sent by the PMSI lender to the prior secured party before the debtor receives possession of the inventory, and it must state that the PMSI lender expects to acquire a PMSI in inventory of that kind. In this case, Mountain State Finance perfected its security interest and sent the required notification to Glacier National Bank before Big Sky Outfitters received the ski equipment. Therefore, Mountain State Finance has priority over Glacier National Bank concerning the newly acquired ski equipment inventory. The correct answer is the one that reflects this understanding of PMSI priority in inventory under Montana law.

Montana’s adoption of Article 9 of the Uniform Commercial Code governs secured transactions. When a buyer of consumer goods, other than a motor vehicle, buys such goods from a consumer seller, the buyer takes the goods free of a security interest even if the security interest is perfected, provided the buyer has no knowledge of the security interest, pays value, and receives delivery of the collateral. This rule is designed to facilitate commerce in used consumer goods by protecting innocent purchasers. The UCC, as adopted in Montana, specifically addresses this scenario in § 30-9-320(b). The key elements are that the seller must be a consumer, the goods must be consumer goods (excluding motor vehicles), the buyer must have no knowledge of the security interest, the buyer must give value, and the buyer must receive delivery. If these conditions are met, the buyer’s ownership is not subject to the prior perfected security interest.

The core issue in this scenario revolves around the perfection of a security interest in accounts that arise from the sale of goods by a merchant located in Montana. Under Montana’s Uniform Commercial Code (UCC) Article 9, specifically concerning the attachment and perfection of security interests, a security interest attaches when value is given, the debtor has rights in the collateral, and a security agreement is in authenticated record. Perfection, on the other hand, is generally achieved by filing a financing statement or, in certain cases, by control or possession. For accounts, filing a financing statement is the primary method of perfection. When a secured party files a financing statement in the correct jurisdiction, and the debtor is located in Montana, that filing perfects the security interest in the accounts. The fact that the accounts arise from sales of goods by a merchant in Montana means that Montana law governs the perfection of the security interest in those accounts, assuming the debtor’s location is in Montana. A subsequent purchaser of those accounts, even if they conduct due diligence, takes the accounts subject to the prior perfected security interest. The UCC prioritizes perfection; a prior perfected security interest generally has priority over a subsequent unperfected interest, and often over subsequent perfected interests depending on the specific priority rules. Therefore, the filing in Montana is crucial for establishing priority. The notification to the account debtors is relevant for enforcement and collection, but not for the perfection or priority of the security interest itself against other creditors or purchasers of the accounts.

In Montana, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in deposit accounts is governed by specific rules. Generally, a secured party perfects a security interest in a deposit account by control. Control is achieved when the secured party is the bank in 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 deposit account. If the secured party is not the bank, and there is no agreement for control, the security interest is generally unperfected. In this scenario, the deposit account is maintained at First National Bank of Helena. Acme Corp. has a security agreement with Big Sky Ranch covering its livestock and also its general intangibles, which would include its bank accounts. Acme Corp. files a UCC-1 financing statement with the Montana Secretary of State. However, filing a financing statement does not perfect a security interest in deposit accounts. Perfection in deposit accounts requires control. Since Acme Corp. did not obtain control over the deposit account at First National Bank of Helena, its security interest remains unperfected. Therefore, when Big Sky Ranch files for bankruptcy, the trustee, having the status of a hypothetical lien creditor under federal bankruptcy law, can avoid Acme Corp.’s unperfected security interest. This means the trustee takes the deposit account free of Acme Corp.’s claim. Montana law, specifically MCA § 30-9A-312(b)(1), states that perfection of a security interest in a deposit account requires control. MCA § 30-9A-104 defines control of a deposit account. Filing a financing statement is insufficient for perfection in deposit accounts.

Montana’s Article 9 of the Uniform Commercial Code governs secured transactions. A key aspect is the perfection of a security interest, which establishes priority over competing claims. For fixtures, which are goods that become so related to particular real property that an interest in them arises under real property law, perfection is achieved by a fixture filing. A fixture filing is a financing statement that indicates it covers fixtures and is filed for record in the office where a mortgage on the real property would be recorded. Montana law, specifically MCA § 30-9A-502, outlines the requirements for a financing statement, which includes providing the name of the debtor, the secured party, and an indication of the collateral. For fixtures, this indication must specifically identify the collateral as fixtures and, importantly, must also include a description of the real property to which the fixtures are affixed. This detailed description is crucial for providing notice to subsequent purchasers or encumbrancers of the real property. Without this specific real property description, the fixture filing would be ineffective to perfect the security interest against such parties. Therefore, the effectiveness of a fixture filing hinges on its compliance with these specific requirements, including the identification of the real property.

The core issue here is determining when a security interest in goods that are permanently attached to real property (fixtures) is perfected and how it relates to prior interests in the real property. Under Montana’s version of UCC Article 9, a security interest in fixtures is perfected by filing a fixture filing. A fixture filing is a financing statement that indicates it covers goods which are or are to become fixtures and contains a description of the real property concerned. The effectiveness of a fixture filing against subsequent purchasers of the real property, including mortgagees, is generally governed by the time of filing. However, a crucial exception exists for fixtures that are readily removable. Goods that are “readily removable” are treated differently from true fixtures. Montana law, like the UCC, defines readily removable goods as those that can be removed without material harm to the real property or the goods themselves. Such goods, even if affixed, retain their character as personal property for secured transaction purposes, and a standard UCC financing statement filing in the appropriate jurisdiction (typically where the debtor is located) is sufficient for perfection against subsequent real property purchasers. Therefore, a security interest in readily removable goods is perfected by a standard UCC filing, not a fixture filing, and this perfection generally continues even if the goods become affixed to real property, provided they remain “readily removable.” This perfection is effective against subsequent purchasers of the real property, including those with a prior perfected security interest in the real property itself, as long as the filing is made before the subsequent purchaser’s interest attaches. In this scenario, the filing in Montana perfected the security interest in the specialized manufacturing equipment. Since the equipment is described as “readily removable” without material harm, it is not considered a true fixture for Article 9 purposes. Thus, the standard UCC filing in Montana is the correct method of perfection and is effective against the subsequent real estate mortgagee.

In Montana, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in deposit accounts is generally achieved by control. Control over a deposit account is established 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 in which the deposit account is maintained to comply with instructions from the secured party directing the disposition of the funds in the account. This is a specific rule for deposit accounts, distinguishing them from other types of collateral like goods or general intangibles. While filing a financing statement is the primary method for perfecting security interests in many types of collateral, it is generally ineffective for deposit accounts. Similarly, possession is not a method for perfecting a security interest in a deposit account. The statute specifically requires control to achieve perfection, which is a higher standard than mere notice filing. Therefore, a secured party who has a security interest in a deposit account held at a bank other than the secured party’s own institution must obtain the bank’s agreement to follow the secured party’s instructions regarding the account. This control mechanism ensures that the secured party can readily access and control the funds in the account.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Montana’s version of UCC Article 9, specifically Montana Code Annotated (MCA) § 30-9-324, a PMSI in inventory has priority over a conflicting security interest in the same inventory, provided certain conditions are met. These conditions include that the PMSI holder must have perfected its security interest by filing a financing statement and, importantly, must have given new value to enable the debtor to acquire the inventory. Furthermore, for the PMSI to have priority over a previously perfected security interest held by another secured party in that same inventory, the PMSI holder must have given new value and the debtor must have received possession of the inventory before the other secured party’s security interest attached. Additionally, the PMSI holder must have filed its financing statement before the debtor received possession of the inventory. If the PMSI holder has knowledge of the other secured party’s prior perfected security interest, it must also notify that secured party in writing of its PMSI before filing its financing statement. In this case, Aurora Bank had a prior perfected security interest in all of Glacier Outfitters’ inventory. Glacier Outfitters then entered into a security agreement with Summit Financial for a loan to purchase new fishing rods. Summit Financial provided new value, took a security interest in the fishing rods, and filed its financing statement before Glacier Outfitters received the rods. Summit Financial also notified Aurora Bank in writing of its PMSI. Therefore, Summit Financial’s PMSI in the fishing rods has priority over Aurora Bank’s earlier perfected security interest in all inventory.

This question probes the concept of perfection of a security interest in goods that are covered by a certificate of title, specifically under Montana law which largely follows Article 9 of the UCC. When a vehicle is titled, the UCC generally provides that perfection of a security interest in that vehicle is achieved by compliance with the Montana Certificate of Title Act, not by filing a UCC financing statement. Montana Code Annotated (MCA) § 30-9-311(1)(a) explicitly states that the filing of a financing statement otherwise required by Article 9 is not effective to perfect a security interest in collateral subject to a certificate of title statute. Instead, MCA § 30-9-311(2) mandates that such a security interest can be perfected only by compliance with the applicable certificate of title law, which in Montana means having the secured party’s name noted on the certificate of title. Therefore, a UCC-1 financing statement filed with the Secretary of State for a vehicle that has been issued a Montana certificate of title would be ineffective for perfection against a buyer in the ordinary course of business or other lienholders. The primary method for establishing a superior security interest in such titled goods is through the notation on the certificate of title itself, as governed by Montana’s specific titling statutes.

The question concerns the perfection of a security interest in a vehicle that is subject to a certificate of title. Montana law, like most states, follows the certificate of title statutes for perfection of security interests in vehicles. Under Montana Code Annotated (MCA) § 30-9A-311(1), a security interest in goods that are covered by a certificate of title can be perfected only by complying with the certificate of title statute. MCA § 30-9A-311(2) further clarifies that compliance with the certificate of title statute is the exclusive method of perfection for such goods. Montana’s certificate of title law, specifically MCA Title 61, Chapter 3, outlines the process for noting security interests on the certificate of title. Section 61-3-202 MCA mandates that a security interest in a vehicle subject to titling requirements is generally perfected by delivery of the security agreement and other required documents to the county clerk for notation on the certificate of title. Filing a financing statement with the Secretary of State, which is the standard method for perfecting security interests in most goods under Article 9, is insufficient for vehicles already covered by a certificate of title in Montana. Therefore, the security interest held by Glacier Bank is not perfected because it relied solely on filing a financing statement and did not comply with the certificate of title notation requirements.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Montana law, specifically Montana Code Annotated (MCA) § 30-9A-312, a PMSI in inventory has priority over a conflicting security interest in the same inventory if the PMSI holder meets certain requirements. First, the PMSI must be perfected by filing a financing statement. Second, the PMSI holder must give new value to enable the debtor to acquire the inventory. Third, the PMSI holder must send an authenticated notification to any other secured party whose previously filed 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, Glacier Bank’s earlier financing statement created a general security interest in all of Glacier Bank’s inventory. Big Sky Financing then acquired a PMSI in the new lumber inventory by providing new value. To achieve priority over Glacier Bank’s prior perfected security interest, Big Sky Financing must perfect its PMSI and provide the required notification to Glacier Bank before Glacier Bank receives the lumber. The question states Big Sky Financing perfected its PMSI by filing on October 1st and sent the notification on October 5th, after Glacier Bank had already received and taken possession of the lumber on October 3rd. Therefore, Big Sky Financing’s notification was too late to establish priority over Glacier Bank’s pre-existing security interest in the inventory. Montana law requires the notification to be sent *before* the debtor receives possession of the inventory or within a specified window after perfection, depending on the type of collateral. For inventory, the notification must be sent before the debtor receives possession. Since Big Sky Financing’s notification was sent after Glacier Bank took possession, Glacier Bank retains its priority.

In Montana, under Article 9 of the Uniform Commercial Code, a purchase money security interest (PMSI) in consumer goods generally has superpriority. However, this superpriority is lost if the secured party fails to file a financing statement or take possession of the collateral before the debtor’s default. The UCC generally provides a 20-day grace period after attachment for a PMSI in inventory or equipment to gain priority over conflicting security interests and purchasers. For consumer goods, the PMSI holder has priority over other secured parties and buyers from the debtor even without filing, provided the goods are consumer goods when they come into the debtor’s possession. However, this automatic perfection for consumer goods is specifically for priority against *other secured creditors and buyers*. It does not protect against a buyer who purchases the goods in the ordinary course of the secured party’s business if the secured party is a merchant selling such goods. In this scenario, Glacier Outfitters, a retailer of outdoor equipment, sells a high-end tent on an installment plan to Ms. Anya Sharma, a resident of Bozeman, Montana. Glacier Outfitters retains a security interest in the tent. This tent qualifies as a consumer good in Ms. Sharma’s hands. Glacier Outfitters does not file a financing statement. Later, Ms. Sharma sells the tent to Mr. Ben Carter, another Bozeman resident, who is unaware of Glacier Outfitters’ security interest. Under UCC § 9-320, a buyer in the ordinary course of business (BIOC) takes free of a security interest created by their seller, even if the security interest is perfected and the buyer knows of its existence, unless the buyer knows the sale violates the terms of the security agreement. However, UCC § 9-320(a) specifically exempts PMSIs in consumer goods from this rule. A buyer of consumer goods takes free of a PMSI if they purchase for value, without knowledge of the PMSI, and for their own personal, family, or household purposes. Since Mr. Carter is purchasing the tent for his personal use and is unaware of Glacier Outfitters’ security interest, he takes the tent free of Glacier Outfitters’ PMSI, despite Glacier Outfitters having a PMSI in consumer goods. The lack of filing by Glacier Outfitters is irrelevant to Mr. Carter’s status as a buyer of consumer goods from Ms. Sharma. The critical factor is Mr. Carter’s status as a buyer of consumer goods for value and without knowledge.

The scenario involves a conflict between a purchase money security interest (PMSI) holder and a prior perfected security interest holder in inventory. Under Montana’s UCC Article 9, a PMSI in inventory generally has priority over a conflicting security interest in the same collateral if certain conditions are met. These conditions, as outlined in Montana Code Annotated (MCA) § 30-9A-324, require that the PMSI be perfected when the debtor receives possession of the inventory and that the PMSI holder provide an authenticated notification to any prior secured party of record. The notification must describe the goods that the debtor expects to acquire and indicate that the debtor expects to incur debt to the secured party that will be secured by the inventory. This notification must be sent before the debtor receives possession of the inventory covered by the PMSI. In this case, the initial security agreement between Glacier Bank and Big Sky Outfitters was perfected on January 15th. The PMSI holder, Mountain Finance, perfected its interest on February 1st and provided notification to Glacier Bank on January 10th, which was before Big Sky Outfitters received the new inventory on January 20th. Therefore, Mountain Finance’s PMSI has priority over Glacier Bank’s prior perfected security interest in the new inventory. The notification provided by Mountain Finance on January 10th, describing the expected inventory and the future debt secured by it, satisfies the requirements of MCA § 30-9A-324(b).

In Montana, the perfection of a security interest in a deposit account as original collateral requires the secured party to obtain control over the account. Under Montana Code Annotated (MCA) § 30-9A-312(1), a security interest is perfected when it has attached and all of the applicable steps for perfection have been taken. For deposit accounts, control is the exclusive method of perfection. Control is defined in MCA § 30-9A-104 and generally means that the secured party is the bank’s customer with respect to the deposit account, or the secured party has agreed with the bank that the bank will comply with instructions from the secured party concerning the account without further consent by the debtor. Filing a financing statement is insufficient to perfect a security interest in a deposit account when it is original collateral. The security interest attaches when the debtor has rights in the collateral, value has been given, and a security agreement is in place. However, attachment alone does not grant perfection. Therefore, even with attachment and a filed financing statement, the security interest in the deposit account remains unperfected until control is established.

The scenario involves a dispute over collateral priority between a purchase money security interest (PMSI) holder and a prior perfected security interest holder. Under Montana’s version of UCC Article 9, a PMSI in inventory generally has priority over a conflicting security interest in the same inventory if certain conditions are met. Specifically, for inventory, the PMSI holder must have perfected its security interest when the debtor received possession of the inventory, and the conflicting secured party must have received notification of the PMSI holder’s intent to acquire an interest in the inventory. In this case, Aurora Bank perfected its security interest in all of Glacier Outfitters’ existing and after-acquired inventory on January 15, 2023. Mountain Gear, Inc. later extended credit to Glacier Outfitters, taking a PMSI in specific equipment and the inventory acquired with its funds. Mountain Gear filed its financing statement on March 1, 2023, and provided written notification to Aurora Bank on March 15, 2023, which was after Glacier Outfitters received possession of the inventory financed by Mountain Gear. Montana UCC § 9-324(b) dictates that a PMSI in inventory has priority over a conflicting security interest in the same inventory if the PMSI holder perfects before the debtor receives possession of the inventory, and the holder of the PMSI gives an authenticated notification to any holder of a conflicting security interest. The notification must be sent in time to be received by the holder of the conflicting security interest before the debtor receives possession of the inventory. Since Mountain Gear received possession of the inventory on February 20, 2023, and its notification to Aurora Bank was sent on March 15, 2023, the notification was received after possession. Therefore, Mountain Gear’s PMSI in the inventory does not have priority over Aurora Bank’s prior perfected security interest in that inventory. Aurora Bank’s earlier perfection on January 15, 2023, gives it priority.

In Montana, a security interest is perfected when a financing statement has been filed, or when the secured party has possession of the collateral, or in some cases, when the security interest automatically attaches. For purchase money security interests (PMSIs) in consumer goods, perfection is automatic upon attachment. However, for other types of collateral, filing is generally required. When a secured party has a security interest in a vehicle, perfection is typically accomplished by noting the security interest on the certificate of title, as governed by Montana’s Certificate of Title Act, which preempts general UCC filing for this specific type of collateral. Therefore, if Glacier Bank correctly filed a financing statement and also properly noted its lien on the certificate of title for the truck, its security interest is perfected against subsequent purchasers and creditors, including any future buyer of the truck. The question specifies that Glacier Bank perfected its security interest, and the most robust method for a vehicle in Montana is through the certificate of title. Subsequent filing of a financing statement under the UCC for a vehicle already covered by a certificate of title would be redundant for perfection purposes, though it might serve other notice functions. The key is that the certificate of title process is the exclusive method for perfecting a security interest in a vehicle subject to titling requirements in Montana.

The core issue here revolves around the perfection of a security interest in accounts that are part of a sale of a business. Under Montana’s Uniform Commercial Code Article 9, specifically concerning the classification of collateral and perfection methods, accounts arising from the sale of goods or services are generally considered general intangibles or accounts, depending on the nature of the underlying transaction. When a business sells its accounts, this transaction is treated as a sale of accounts, not a secured transaction, unless the seller retains an interest in the accounts. However, even in a sale of accounts, the buyer’s interest must be perfected. The primary method for perfecting a security interest in accounts is by filing a financing statement. While possession is a perfection method for certain types of collateral, it is not applicable to accounts. Control is a perfection method for deposit accounts, investment property, and letter-of-credit rights, none of which are the primary collateral here. Assignment of accounts for the purpose of collection can sometimes be excluded from Article 9, but a sale of accounts generally falls under Article 9. Therefore, for the buyer of the accounts to have a perfected interest against third parties, a financing statement must be filed.

The core issue here is the priority of a security interest when goods are delivered to a buyer who then defaults on payment, and a third party has a perfected security interest in the buyer’s after-acquired property. In Montana, as governed by Article 9 of the Uniform Commercial Code (UCC), a purchase money security interest (PMSI) generally has priority over a previously perfected security interest in the same collateral if certain requirements are met. Specifically, under UCC § 9-324, a PMSI in goods other than inventory 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 certain grace period. For non-inventory collateral, this grace period is typically twenty days after the debtor receives possession. In this scenario, Meadowlark Ranch secured its loan with a blanket security interest in all of Willow Creek Farms’ existing and after-acquired farm equipment, which was properly perfected by filing a financing statement. This creates a perfected security interest in the tractor that Willow Creek Farms later acquires. When Big Sky Equipment sells the tractor to Willow Creek Farms, Big Sky has a purchase money security interest in that specific tractor. To maintain priority over Meadowlark Ranch’s earlier perfected security interest, Big Sky must ensure its PMSI is perfected. Under Montana law (UCC § 9-317(e)), a PMSI in goods other than inventory is effective against a conflicting interest in the goods if it is perfected within twenty days after the debtor receives possession of the collateral. Since Big Sky perfected its security interest on April 25th, which is within twenty days of Willow Creek Farms receiving possession of the tractor on April 10th, Big Sky’s PMSI is perfected in a timely manner. Therefore, Big Sky’s purchase money security interest in the tractor will have priority over Meadowlark Ranch’s previously perfected blanket security interest in after-acquired property.

The scenario describes a situation involving a purchase money security interest (PMSI) in inventory. Under Montana’s Uniform Commercial Code (UCC) Article 9, a PMSI grants the secured party special priority rights. For a PMSI in inventory to be perfected and achieve superpriority over prior perfected security interests, specific notification requirements must be met. The secured party must file a financing statement, and the debtor must have received possession of the inventory. Crucially, the secured party must also give an authenticated notification to any other secured party or lienholder who has previously filed a financing statement covering the same goods, or who has perfected a security interest in the same goods. This notification must be given before the debtor receives possession of the inventory. In this case, Juniper Valley Bank had a prior perfected security interest in all of Elara’s inventory. Meadowbrook Funding provided financing for Elara’s purchase of new artisanal pottery equipment, which constitutes inventory. Meadowbrook Funding filed a financing statement and delivered the equipment to Elara. However, Meadowbrook Funding failed to provide any notification to Juniper Valley Bank prior to Elara taking possession of the equipment. Therefore, Meadowbrook Funding’s PMSI, while perfected by filing and delivery, does not have priority over Juniper Valley Bank’s prior perfected security interest in the same collateral. Montana UCC § 30-9-324(b) dictates that a perfected PMSI in inventory has priority over a conflicting security interest in the same inventory if the conditions are met, including notification. Since the notification requirement was not fulfilled, the prior perfected security interest of Juniper Valley Bank prevails.

The question concerns the perfection of a security interest in a deposit account. Under Montana’s Uniform Commercial Code Article 9, specifically MCA § 30-9A-312(b), a security interest in a deposit account can only be perfected by control. Control of a deposit account is achieved when the secured party is the bank with which the deposit account is maintained, or when the secured party obtains the bank’s agreement to comply with the secured party’s instructions regarding the deposit account. The debtor’s voluntary transfer of control to the secured party is the method of perfection. Filing a financing statement is generally not sufficient for perfection of security interests in deposit accounts, as these are typically considered “money” or “deposit accounts” which have specific perfection rules. The scenario describes a debtor granting a security interest in its checking account to a lender, and the lender taking possession of the account through an agreement with the bank. This direct control, rather than filing, is the operative perfection mechanism in Montana for such collateral.

The scenario involves a security interest in inventory that is continuously replenished. When a secured party has a continuously perfected security interest in after-acquired inventory, that interest generally continues in any identifiable proceeds of the inventory. Montana’s Uniform Commercial Code (UCC) Article 9 addresses the priority of security interests. Specifically, when a secured party has a perfected security interest in inventory and that inventory is sold, the security interest typically continues in the proceeds of that sale, provided the proceeds are identifiable. In this case, the proceeds are cash from the sale of the collateral. Montana UCC § 9-315 states that a security interest continues in collateral if it is sold, exchanged, or otherwise disposed of, and also continues in any identifiable proceeds of the collateral. Furthermore, Montana UCC § 9-315(c) specifies that a security interest in proceeds is a continuously perfected security interest if the security interest in the original collateral was perfected, but it ceases to be perfected after ten days unless the proceeds are identifiable cash proceeds and the security interest in the cash proceeds is perfected. However, the perfection of the security interest in the original collateral (inventory) also extends to identifiable cash proceeds from its sale. Therefore, the security interest in the cash proceeds from the sale of the original inventory remains perfected without the need for a separate filing, as it is a direct continuation of the perfected security interest in the inventory. The crucial element is that the proceeds are identifiable. Cash proceeds are generally considered identifiable. The fact that the collateral is inventory subject to after-acquired property clauses and that the secured party has a continuously perfected security interest means the security interest attaches to the new inventory as it arrives. The proceeds from the sale of the old inventory are also covered.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Montana’s version of UCC Article 9, a PMSI holder in inventory must satisfy specific perfection requirements to gain priority over other secured parties. The debtor, “Glacier Outfitters,” purchased inventory on credit from “Big Sky Apparel.” Big Sky Apparel retained a security interest in this inventory. To perfect this PMSI, Big Sky Apparel must file a financing statement before or within twenty days after the debtor receives possession of the inventory. Additionally, for inventory, UCC § 9-324(b) requires that the PMSI holder give an authenticated notification to any prior secured party who has filed a financing statement covering the same inventory. This notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor and describe the inventory. This notification must be sent before the debtor receives possession of the inventory. In this case, Big Sky Apparel filed its financing statement on October 15th, after Glacier Outfitters received the inventory on October 10th. This filing is too late to establish PMSI priority under the twenty-day grace period, as the grace period applies to the filing of the financing statement, not the receipt of goods. Furthermore, Big Sky Apparel failed to send the required notification to the prior secured party, “Mountain Trust Bank,” before Glacier Outfitters received the inventory. Therefore, Big Sky Apparel’s security interest is not perfected as a PMSI in inventory and will not have priority over Mountain Trust Bank’s earlier perfected security interest in all of Glacier Outfitters’ assets. The correct outcome is that Mountain Trust Bank will have priority over the inventory.

The core issue here is the priority of security interests when a debtor defaults and collateral is involved. Montana’s Article 9 of the Uniform Commercial Code governs secured transactions. When a security interest is perfected, it generally has priority over unperfected interests and later perfected interests. In this scenario, Yellowstone Outfitters, Inc. has a perfected security interest in all of its inventory, which includes the specialized fishing gear. This perfection occurred by filing a financing statement. Big Sky Bank also has a security interest in the same collateral. Big Sky Bank’s security interest was granted after Yellowstone Outfitters’ perfected interest. Even though Big Sky Bank also filed a financing statement, Yellowstone Outfitters’ prior perfection establishes its superior claim to the collateral. Montana law, specifically UCC § 9-322, dictates that the first to file or perfect generally has priority. Therefore, Yellowstone Outfitters, holding the earlier perfected security interest, has priority over Big Sky Bank’s later perfected security interest in the fishing gear. The fact that the collateral is inventory and that both parties are sophisticated commercial entities does not alter this fundamental priority rule.

In Montana, under Article 9 of the Uniform Commercial Code, 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 unless the secured party authorized the disposition free of the security interest. However, if the disposition is authorized, the security interest attaches to any identifiable proceeds of the collateral. When a buyer in the ordinary course of business purchases goods from a seller who is engaged in the business of selling goods of that kind, the buyer takes the goods free of a security interest created by the seller, even if the security interest is perfected, unless the buyer also knows that the sale is in violation of the security agreement. This is known as the “buyer in ordinary course of business” exception. In this scenario, Glacier Outfitters, Inc. is a seller of sporting goods, and the security interest held by First National Bank of Montana is in Glacier Outfitters’ inventory. When a customer, Ms. Anya Sharma, purchases a kayak from Glacier Outfitters, she is acting as a buyer in the ordinary course of business. Therefore, her purchase of the kayak is generally free of First National Bank of Montana’s security interest, even if perfected, because she is buying from a merchant who regularly sells such goods and she has no knowledge that the sale violates the security agreement. The security interest does not continue in the kayak in Ms. Sharma’s hands.

In Montana, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in deposit accounts is generally achieved by control. Control over a deposit account is established when the secured party is the bank in which the deposit account is maintained. Alternatively, control can be achieved if the debtor has agreed in writing that the bank will comply with the secured party’s instructions regarding the balance of the deposit account, and the bank has acknowledged this agreement. This is a key distinction from other types of collateral where filing a financing statement is the primary method of perfection. For deposit accounts, filing is generally ineffective for perfection. The scenario involves a security interest granted by a Montana-based company, “Glacier Goods Inc.,” to “Big Sky Bank” in its operating deposit account held at “Mountain View Bank.” Since Big Sky Bank is not the bank where the deposit account is maintained, it cannot achieve control by simply being the depositary bank. Therefore, Big Sky Bank must obtain control through the debtor’s agreement and the depositary bank’s acknowledgment. If Glacier Goods Inc. has not provided written consent to Mountain View Bank that Mountain View Bank will follow Big Sky Bank’s instructions, or if Mountain View Bank has not acknowledged such an agreement, then Big Sky Bank’s security interest is unperfected. The question focuses on the method of perfection for a deposit account when the secured party is not the depositary bank. Perfection requires control, which is defined by UCC § 9-104. Filing a financing statement is insufficient for perfection of a security interest in a deposit account under UCC § 9-312(b).

The scenario involves a dispute over collateral priority between a purchase money security interest (PMSI) holder and a prior perfected secured party. Under Montana’s Uniform Commercial Code Article 9, a PMSI in inventory generally has priority over a conflicting security interest in the same inventory if the PMSI holder meets specific notification requirements. Montana Code Annotated (MCA) § 30-9-324 outlines the rules for PMSI priority. For inventory, the PMSI holder must have perfected its security interest when the debtor received possession of the inventory. Crucially, the PMSI holder must also give an authenticated notification to any prior secured party whose security interest has already been perfected. This notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor, describing the inventory by item or type. This notification must be sent before the debtor receives possession of the inventory. In this case, Glacier Outfitters perfected its security interest in all of “Mountain Gear Inc.’s” inventory on January 15th. Subsequently, Summit Sports, holding a PMSI in specialized climbing equipment, delivered that equipment to Mountain Gear Inc. on February 1st. Summit Sports filed its financing statement on January 20th, perfecting its PMSI. However, Summit Sports failed to send the required authenticated notification to Glacier Outfitters before Mountain Gear Inc. received possession of the climbing equipment. Because Summit Sports did not satisfy the notification requirement of MCA § 30-9-324(b), its PMSI in the climbing equipment does not have priority over Glacier Outfitters’ prior perfected security interest. Glacier Outfitters’ security interest remains superior.

The scenario involves a purchase money security interest (PMSI) in inventory. Under Montana’s Uniform Commercial Code (UCC) Article 9, a PMSI holder in inventory generally must satisfy specific notification requirements to maintain priority over other secured parties whose security interests have already attached to that inventory. Specifically, Montana UCC § 9-324(b) (which mirrors the general UCC provision) requires that for a PMSI in inventory to have priority over a conflicting security interest in the same inventory, the PMSI holder must have given new value to the debtor, the debtor must receive possession of the inventory, and the notification requirement must be met. The notification requirement mandates that the PMSI holder must notify any secured party that has filed a financing statement covering the same inventory or goods, or that has perfected a security interest in the same inventory or goods, that it has or expects to acquire a PMSI in inventory of the debtor, including product and proceeds thereof. This notification must be in writing and reasonably identify the secured party giving the notification and the inventory. Furthermore, the notification must be received by the secured party before the debtor receives possession of the inventory. In this case, the Bank has a prior perfected security interest in all of the debtor’s inventory. Glacier Corp. acquired a PMSI in new inventory. Glacier Corp. filed its financing statement on May 1st and the debtor received possession of the inventory on May 10th. Glacier Corp. sent its notification to the Bank on May 5th. Since the notification was sent *after* the debtor received possession of the inventory, it fails to meet the timing requirement of Montana UCC § 9-324(b)(2)(B), which requires notification to be received by the prior secured party *before* the debtor receives possession. Therefore, Glacier Corp.’s PMSI in the inventory does not have priority over the Bank’s prior perfected security interest. The Bank’s security interest remains prior.