The core issue revolves around the perfection of a security interest in collateral that is subject to a certificate of title statute. New Jersey’s version of Article 9, like most states, specifies that perfection of a security interest in goods covered by a certificate of title is accomplished by compliance with the certificate of title statute, not by filing a financing statement under Article 9. Specifically, N.J.S.A. 12A:9-303(a) states that Article 9 does not apply to the extent that another statute of New Jersey provides for a security interest in a vehicle covered by a certificate of title to be perfected by notation on the certificate of title. N.J.S.A. 12A:9-311(b) further clarifies that compliance with the certificate of title statute is the exclusive method of perfection for such goods. Therefore, the security interest in the vehicle is perfected when the secured party’s name is indicated on the certificate of title. The question asks about the point of perfection. Since the security interest attached when the debtor received possession of the vehicle and granted the security interest, and the perfection occurs upon compliance with the certificate of title statute, the perfection is effective from the date the notation is made on the certificate of title.

The scenario describes a purchase money security interest (PMSI) in inventory. Under New Jersey’s UCC Article 9, a secured party claiming a PMSI in inventory must satisfy two primary requirements to achieve priority over other secured parties and buyers. First, the security interest must be perfected by filing a financing statement before or within twenty days after the debtor receives possession of the inventory. Second, the secured party must give an authenticated notification to any other secured party or financier who has previously filed a financing statement covering the same inventory or has previously filed a financing statement covering after-acquired inventory of the same type. This notification must be sent before the debtor receives possession of the inventory. In this case, Sterling Bank’s security interest in the new inventory is a PMSI. Sterling Bank filed its financing statement on January 15th, which is before the debtor received possession of the inventory on January 20th. However, Sterling Bank failed to send the required notification to Capital Corp, which had a prior filed financing statement covering the debtor’s existing and after-acquired inventory. Therefore, Sterling Bank’s PMSI in the inventory is subordinate to Capital Corp’s prior perfected security interest. The perfection of Sterling Bank’s interest is effective from the date of filing, January 15th, but its priority over Capital Corp is defeated due to the lack of notification.

The core issue here revolves around the perfection of a security interest in accounts, specifically in the context of New Jersey’s Article 9. Under UCC § 9-301(1), a security interest is perfected when it has attached and when a financing statement has been filed or when the secured party has obtained control over the collateral. For accounts, filing a financing statement is the primary method of perfection. UCC § 9-308(a) states that a security interest in accounts is perfected when it attaches. However, UCC § 9-310(a) generally requires filing a financing statement to perfect a security interest, with limited exceptions. Accounts are not among the types of collateral for which possession or control is the sole or primary method of perfection as outlined in UCC § 9-313 and UCC § 9-104 through UCC § 9-107. Therefore, even though the security interest attached when the agreement was signed and value was given, it remains unperfected against third parties in a bankruptcy proceeding until a financing statement is filed. The bankruptcy trustee, acting as a hypothetical lien creditor under UCC § 9-317(a)(2), will have priority over an unperfected security interest. The debtor’s bankruptcy filing creates a hypothetical lien creditor status for the trustee as of the commencement of the case. Thus, the security interest in the accounts remains unperfected and subordinate to the trustee’s interest.

The core issue in this scenario revolves around the perfection of a security interest in a deposit account. Under New Jersey’s UCC Article 9, a security interest in a deposit account can only be perfected by control. Control is achieved when the secured party is the depositary bank with which the deposit account is maintained, or when the secured party obtains the agreement of the depositary bank that the depositary bank will comply with instructions from the secured party directing the disposition of the funds in the account, or when the secured party becomes the owner of the deposit account. In this case, Acme Corp has a security interest in the deposit account of its customer, Beta Inc. However, Acme Corp has not taken any action to obtain control over the deposit account. It has not become the depositary bank, nor has it obtained an agreement from the depositary bank (Commerce Bank) to act on its instructions. Therefore, Acme Corp’s security interest is unperfected. A subsequent buyer of the account, like Delta Corp, who purchases the account for value and without knowledge of Acme Corp’s security interest, takes free of the unperfected security interest. This is because perfection by control is the exclusive method for perfecting a security interest in a deposit account, and Acme Corp failed to meet this requirement.

The core issue here is the priority of security interests when a debtor moves collateral into a new jurisdiction and the secured party fails to reperfect. Under New Jersey’s UCC Article 9, specifically N.J.S.A. 12A:9-316, perfection of a security interest in collateral that is covered by a certificate of title is governed by the law of the jurisdiction that issued the certificate. When collateral is brought into New Jersey, and it is already perfected in another jurisdiction, the perfection continues for a period of four months. If the secured party files a financing statement in New Jersey within that four-month period, the perfection continues uninterrupted. However, if the four-month period lapses without a New Jersey filing, the security interest becomes unperfected in New Jersey as against a buyer of the collateral that gives value and receives delivery of the collateral without knowledge of the security interest. In this scenario, the collateral, a vehicle, was perfected in Pennsylvania. When it was brought to New Jersey, the perfection continued for four months. The debtor then sold the vehicle to Ms. Albright, who purchased it for value and without knowledge of the security interest. This sale occurred after the four-month grace period had expired and before the secured party filed a financing statement in New Jersey. Therefore, Ms. Albright, as a buyer in the ordinary course of business who took without knowledge and after the grace period expired, takes the vehicle free of the unperfected security interest. The secured party’s failure to reperfect in New Jersey within the statutory timeframe renders their interest subordinate to Ms. Albright’s purchase.

The core issue here revolves around the perfection of a security interest in a deposit account under New Jersey’s UCC Article 9. According to UCC § 9-312(b), a security interest in a deposit account as original collateral can only be perfected by control. Control is achieved when the secured party is the bank in 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. In this scenario, both parties have attempted to secure their interests. However, the security interest granted to “FinCorp” is perfected by control because FinCorp, as the bank where the deposit account is held, automatically has control. “Prime Lending” attempted to perfect by possession of a certificate of deposit, which is not the same as control over the deposit account itself for the purpose of Article 9 perfection. Furthermore, even if Prime Lending had a valid security interest in the CD, their perfection method is insufficient for a deposit account. Therefore, FinCorp’s security interest has priority.

The core issue here revolves around the perfection of a security interest in a deposit account. Under New Jersey’s Article 9, a security interest in a deposit account can only be perfected by control. Control is established when the secured party is the bank in which the deposit account is maintained, or when the debtor has agreed to the bank’s disposition of the funds in the account. In this scenario, Apex Bank has a perfected security interest in the debtor’s general intangibles, which includes the right to receive payment from the construction project. However, the payment is to be made into a specific deposit account at Summit Bank. Apex Bank’s security interest in the deposit account itself is not perfected because it did not obtain control over that account. Mere mention of the account in the general intangibles security agreement is insufficient for perfection of a security interest in the deposit account as a distinct asset. The security interest in the general intangibles remains valid and perfected, but it does not extend to the deposit account as a segregated fund without the requisite control. Therefore, Apex Bank’s security interest in the deposit account is unperfected.

In New Jersey, as 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 with which the deposit account is maintained, or when the secured party obtains the consent of the bank with which the deposit account is maintained and agrees that the bank will comply with instructions from the secured party directing the disposition of the funds in the account without further consent from the debtor. This is further detailed in New Jersey Statutes Annotated § 12A:9-104. Filing a financing statement is not sufficient to perfect a security interest in a deposit account; control is the exclusive method. Therefore, if a security interest is granted in a deposit account held at a bank in New Jersey, and the secured party has not obtained control as defined by the UCC, the security interest remains unperfected against third parties.

The scenario involves a purchase money security interest (PMSI) in inventory. A PMSI grants the secured party special priority rights. For a PMSI in inventory to be effective against other secured parties and buyers, the secured party must satisfy specific requirements under Article 9 of the Uniform Commercial Code, as adopted in New Jersey. These requirements include perfection by filing a financing statement and providing notification to any existing secured parties who have filed financing statements covering the same collateral. Specifically, under NJ UCC § 9-324(b), a PMSI in inventory has priority over a conflicting security interest in the same inventory if the PMSI holder perfects its interest before the debtor receives possession of the inventory and gives notification to any other secured party who has filed a financing statement covering the inventory. The notification must be sent within a specific timeframe before the debtor receives possession. The key is that the notification must be sent to any secured party who has filed a financing statement covering the collateral. In this case, Global Bank has a prior perfected security interest in all of the debtor’s inventory. For Apex Corp’s PMSI to have priority, Apex Corp must perfect its interest and provide notification to Global Bank. The notification requirement is crucial for establishing priority over a previously perfected security interest in the same collateral. If Apex Corp fails to provide this notification, its PMSI will be subordinate to Global Bank’s prior perfected security interest. The question asks about the most critical step for Apex Corp to achieve priority over Global Bank’s existing security interest. While filing the financing statement is necessary for perfection, the notification to the prior secured party is the specific requirement that elevates a PMSI in inventory over a prior general inventory security interest. Therefore, the notification to Global Bank is the critical step.

The core issue revolves around the perfection of a security interest in accounts receivable generated by a business operating in New Jersey, specifically concerning the interplay between Article 9 of the UCC and the priority of a subsequent assignee. When a secured party files a financing statement in the correct jurisdiction, their security interest in accounts is generally perfected. New Jersey follows the general UCC rule that perfection of a security interest in accounts is achieved by filing a financing statement in the jurisdiction where the debtor is located. For a registered organization like a corporation, this is typically the state of incorporation. In this scenario, “Coastal Innovations Inc.” (the debtor) is incorporated in Delaware. Therefore, for a security interest in its accounts to be perfected against third parties, a financing statement must be filed in Delaware. “Oceanic Lending Group” (the initial secured party) correctly filed its financing statement in Delaware, thereby perfecting its security interest in Coastal Innovations’ accounts. Subsequently, “Shoreline Capital Partners” (the subsequent assignee) received an assignment of the same accounts. For Shoreline Capital Partners to achieve priority over Oceanic Lending Group’s already perfected security interest, it would need to establish a superior claim. However, Article 9 generally dictates that the first to file or perfect has priority. Since Oceanic Lending Group perfected its interest by filing in Delaware, and Shoreline Capital Partners’ assignment is of the same collateral (accounts), Shoreline Capital Partners’ interest would be subordinate to Oceanic Lending Group’s perfected security interest unless Shoreline Capital Partners also perfected its interest in a manner that would grant it priority, which is not indicated by the facts. The critical point is that the initial perfection by filing in Delaware is what establishes priority for Oceanic Lending Group. The location of the collateral (accounts) is generally not the determining factor for perfection; rather, it is the location of the debtor. Therefore, Oceanic Lending Group’s perfection in Delaware is valid and establishes its priority.

The core issue revolves around the perfection of a security interest in collateral that is subject to a purchase-money security interest (PMSI) and then later transferred to a new secured party. In New Jersey, under UCC § 9-317(e), a buyer of goods takes free of a security interest if the buyer gives value and receives delivery of the collateral without knowledge of the security interest. However, this protection does not extend to a buyer who is also a secured party or a buyer who is a financing agency. In this scenario, Sterling Corp. initially held a PMSI in the specialized machinery sold to Apex Manufacturing. Sterling perfected its security interest by filing a financing statement in New Jersey. Apex then traded in the specialized machinery as part of the purchase of new equipment from Innovate Solutions. Innovate Solutions provided new financing for the purchase of the new equipment and took a security interest in all of Apex’s assets, including the trade-in machinery, which was delivered to Innovate. Innovate also filed a financing statement. The critical point is that Innovate Solutions is not a buyer in the ordinary course of business of the specialized machinery. It is a secured party taking collateral that was previously owned by Apex. When Apex traded in the machinery, it was essentially selling it to Innovate, but Innovate’s primary role here is as a secured party financing the new purchase. Under UCC § 9-317(a)(1), a security interest is ineffective against a buyer of goods who gives value and receives delivery of the collateral unless the secured party has perfected its interest before the buyer receives delivery. However, this protection is for a buyer, not for a subsequent secured party acquiring collateral that was previously subject to another security interest. Sterling Corp. had perfected its PMSI in the specialized machinery by filing. When Apex traded in the machinery to Innovate Solutions, the security interest held by Sterling remained attached to the machinery, as the trade-in transaction did not extinguish Sterling’s perfected security interest. Innovate Solutions, by taking the machinery as part of a financing arrangement for new equipment, would have taken the machinery subject to Sterling’s prior perfected security interest. Innovate’s own filing would create a security interest in the machinery, but Sterling’s perfected PMSI would have priority over Innovate’s subsequently filed security interest in that specific collateral, assuming Sterling’s filing was proper and effective. Therefore, Sterling Corp. retains priority over Innovate Solutions concerning the specialized machinery.

The core issue here revolves around the perfection of a security interest in a deposit account under New Jersey’s Article 9. According to NJ UCC § 9-312(b)(1), a security interest in a deposit account as original collateral can only be perfected by control. Control is defined in NJ UCC § 9-104. For a deposit account, control is achieved when the secured party becomes the bank’s customer with respect to the deposit account, or the secured party has an agreement with the bank and the bank agrees to follow the secured party’s instructions regarding the account, without further consent by the debtor. In this scenario, Meadowbrook Bank has a security interest in the deposit account of Artisan Builders, Inc. However, Meadowbrook Bank has only taken a security agreement and filed a financing statement. Filing a financing statement is generally sufficient for perfection in many types of collateral, but it is not the method for perfecting a security interest in a deposit account when the secured party is not the bank itself. Since Meadowbrook Bank did not obtain control over the deposit account, its security interest is unperfected. When a debtor files for bankruptcy, an unperfected security interest is subject to avoidance by the bankruptcy trustee as a hypothetical lien creditor under 11 U.S.C. § 544. Therefore, the bankruptcy trustee for Artisan Builders, Inc. would have priority over Meadowbrook Bank’s unperfected security interest in the deposit account. The question tests the understanding of the exclusive perfection method for deposit accounts and the implications of unperfected security interests in bankruptcy.

The core issue here revolves around the perfection of a security interest in accounts receivable that are also being financed by another lender. In New Jersey, as under Article 9 of the Uniform Commercial Code, a secured party must take appropriate steps to establish priority over other claimants. For accounts, perfection is typically achieved by filing a financing statement. However, if a secured party takes possession of the accounts or has them delivered to them, that can also constitute perfection. When multiple secured parties have security interests in the same collateral, priority is generally determined by the first to file or the first to perfect. In this scenario, “Capital Lending” filed a financing statement on March 1st, which perfects their security interest in all of “Artisan Crafts Inc.’s” accounts, including after-acquired accounts. “Monarch Financial” then attempted to perfect by taking possession of the accounts on March 15th. Since Capital Lending filed first, their security interest has priority over Monarch Financial’s interest in the accounts that arose before March 15th. However, Monarch Financial’s perfection by possession is effective from the moment of possession, March 15th. Therefore, for accounts arising on or after March 15th, Monarch Financial’s perfection by possession would give them priority over any unperfected security interest. Since Capital Lending’s initial filing covers after-acquired accounts, their security interest in accounts arising after March 15th is also perfected. The crucial point of conflict arises with accounts generated *after* Monarch Financial took possession but *before* Capital Lending’s filing would have naturally covered them if it were a new filing. However, Capital Lending’s initial filing on March 1st covers after-acquired accounts. This means their security interest attaches and is perfected as soon as the accounts are acquired by Artisan Crafts Inc., provided the after-acquired property clause in their security agreement is valid. Therefore, Capital Lending’s perfected security interest in after-acquired accounts, established by their March 1st filing, will have priority over Monarch Financial’s perfection by possession for all accounts, including those arising after March 15th. This is because the initial filing provides continuous perfection for after-acquired collateral.

The core issue here revolves around the perfection of a security interest in accounts. Under New Jersey’s UCC Article 9, a security interest in accounts is generally perfected by filing a financing statement. However, there’s a specific exception for “account debtors” who are obligated on accounts that are part of a sale of accounts. In such a scenario, notification to the account debtor that the accounts have been assigned to the secured party constitutes perfection. This is known as perfection by notification. In this case, Sterling Corp. granted a security interest in its accounts to Commerce Bank. Commerce Bank filed a financing statement, which is a standard method of perfection for accounts. Subsequently, Sterling Corp. sold a significant portion of its accounts to Apex Acquisitions. Apex Acquisitions did not file a financing statement but instead notified the account debtors of the assignment. When a debtor grants a security interest in accounts to one party and then sells those accounts to another, and both parties take steps that could be construed as perfection, the priority rules of UCC Article 9 apply. Specifically, UCC § 9-324 addresses the priority of a security interest in accounts that are the subject of a sale of accounts. The UCC generally prioritizes a buyer of accounts over a secured party whose security interest attached to the accounts before the sale, if the buyer provides new value and takes possession of the collateral, or has rights in the collateral. However, the perfection method for buyers of accounts is distinct. Under UCC § 9-310(a), perfection is generally by filing. But UCC § 9-310(c) provides that a security interest in accounts that constitutes a sale of accounts is perfected by notification to the account debtor. When there is a conflict between a secured party who has perfected by filing and a buyer of accounts who has perfected by notification, the buyer of accounts who perfects by notification generally has priority over a prior perfected secured party whose security interest attaches to the accounts after the sale, or whose perfection predates the sale but is not otherwise perfected against the buyer. Here, Commerce Bank perfected by filing. Apex Acquisitions, as a buyer of accounts, perfected by notification to the account debtors. Since Apex Acquisitions is a buyer of accounts and perfected by notification, it generally takes priority over a prior secured party like Commerce Bank with respect to the sold accounts, especially when the sale itself is a primary transaction for Apex. The UCC prioritizes this method of perfection for sales of accounts. Therefore, Apex Acquisitions would have priority over Commerce Bank regarding the accounts it purchased and notified the account debtors about.

The core issue here is determining the priority of security interests when a debtor relocates. Article 9 of the Uniform Commercial Code, as adopted in New Jersey, governs secured transactions. When collateral is a fixture, its classification for perfection purposes is crucial. A fixture is goods that become so related to particular real property that an interest in them arises under real property law. New Jersey law, like the UCC, treats fixtures differently from other types of collateral. Perfection of a security interest in fixtures is generally achieved by filing a fixture filing in the real property records, not by filing a standard UCC-1 financing statement in the personal property records of the debtor’s domicile. In this scenario, the debtor, “Artisan Woodworks,” located in New Jersey, has a security interest granted to “Capital Creditors Inc.” in specialized milling equipment. This equipment is intended to be affixed to the real property owned by Artisan Woodworks in New Jersey. The security agreement clearly states the collateral is the milling equipment, and Capital Creditors Inc. files a standard UCC-1 financing statement in the New Jersey Secretary of State’s office, which is the correct place for filing for general intangible or equipment collateral. However, the equipment is indeed affixed to the real property, making it a fixture. Under UCC § 9-334, which is applicable in New Jersey, a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the fixture filing is made before the interest of the encumbrancer or owner is of record. Furthermore, a security interest in fixtures is generally subordinate to a subsequent recorded interest in the real property unless a fixture filing is made. The critical point is that Capital Creditors Inc. did not make a fixture filing. Instead, they made a standard UCC filing. A standard UCC filing is generally ineffective to perfect a security interest in fixtures against a subsequent purchaser or encumbrancer of the real property. “Builders Supply Co.” has a recorded mortgage on the real property. Since Capital Creditors Inc. failed to make a fixture filing in the real property records, their security interest in the milling equipment, which has become a fixture, is subordinate to Builders Supply Co.’s prior recorded mortgage. Therefore, Builders Supply Co. would have priority. The question tests the understanding of the perfection requirements for fixtures and the priority rules that apply when a standard UCC filing is made for collateral that qualifies as a fixture, and there is a conflicting interest in the real property. The correct answer hinges on the distinction between a standard UCC filing and a fixture filing and the priority afforded to a properly filed fixture filing against prior real property interests.

The core issue here is the priority of security interests when a debtor has granted multiple security interests in the same collateral. Under New Jersey’s Article 9, a perfected security interest generally has priority over an unperfected security interest. Perfection is typically achieved by filing a financing statement. In this scenario, Creditor A has a properly perfected security interest in the specialized manufacturing equipment. Creditor B’s security interest, though granted earlier, is unperfected because no financing statement was filed. When a debtor defaults, the secured party with the highest priority has the first claim to the collateral. Since Creditor A’s interest is perfected, it takes priority over Creditor B’s unperfected interest, regardless of the chronological order in which the security agreements were executed. Therefore, Creditor A is entitled to the proceeds from the sale of the equipment to satisfy its secured debt first. The remaining proceeds, if any, would then be available to Creditor B. The amount of the debt owed to Creditor A is \( \$150,000 \), and the equipment sold for \( \$200,000 \). Creditor A is entitled to \( \$150,000 \) of the proceeds. The remaining \( \$50,000 \) would be available for Creditor B.

The scenario involves a security interest in inventory and accounts arising from the sale of that inventory. In New Jersey, as governed by UCC Article 9, when a secured party has a perfected security interest in inventory, that security interest automatically extends to the accounts receivable generated from the sale of that inventory, provided the accounts arise from the sale of inventory in the ordinary course of business. This is known as “proceeds” under UCC § 9-102(a)(64). UCC § 9-315(a)(1) states that a security interest attaches to collateral and continues in any identifiable proceeds of that collateral. The perfection of the security interest in the inventory generally extends to the proceeds of that inventory. Therefore, if the security interest in the inventory was properly perfected, the secured party retains a perfected security interest in the accounts that are proceeds of that inventory without the need for a separate filing or notification regarding the accounts, as long as the accounts are identifiable. The key is that the security interest “continues in any identifiable proceeds.” Since the accounts receivable are direct proceeds from the sale of the collateral (inventory), the perfected security interest in the inventory automatically extends to these accounts.

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 has granted a security interest in that collateral. Under New Jersey’s Uniform Commercial Code (UCC) Article 9, specifically NJSA 12A:9-320, a buyer in the ordinary course of business takes free of a security interest created by the seller even though the security interest is perfected and even though the buyer knows of its existence, unless the buyer knows that the sale is in violation of the security agreement. In this scenario, “Artisan Appliances” (Debtor) has granted a security interest in its inventory to “Capital Bank” (Secured Party). “Brenda’s Bargains” (Buyer) is a buyer in the ordinary course of business, purchasing appliances from Artisan Appliances. Capital Bank’s security interest in the inventory was perfected. Brenda’s Bargains purchased the appliances in good faith and without knowledge that the sale was in violation of Capital Bank’s security agreement. Therefore, Brenda’s Bargains takes the inventory free of Capital Bank’s security interest. The security interest held by “First Finance Corp.” is irrelevant to the priority between Capital Bank and Brenda’s Bargains because Brenda’s Bargains’ status as a buyer in the ordinary course of business grants it superior rights to the inventory over Capital Bank’s perfected security interest in that inventory.

The scenario describes a situation where a buyer in the ordinary course of business purchases goods from a merchant who is a debtor under a security agreement. The secured party, “Coastal Capital Corp.,” has a perfected security interest in all inventory of “Shoreline Goods LLC.” Shoreline Goods LLC sells a boat, which is part of its inventory, to “Marina Investments LLC.” Marina Investments LLC is a buyer in the ordinary course of business. Under New Jersey’s UCC Article 9, specifically N.J.S.A. 12A:9-320, a buyer in the ordinary course of business takes free of a security interest created by their seller even though the security interest is perfected and even though the buyer knows of its existence, unless the buyer knows that the sale is in violation of the security agreement. The question hinges on whether Marina Investments LLC’s knowledge of the security agreement’s existence, without knowledge that the sale itself violated the agreement, defeats its buyer-in-ordinary-course status. The UCC prioritizes the free flow of goods in commerce, and buyers in the ordinary course are a key part of this. Therefore, Marina Investments LLC, as a buyer in the ordinary course of business, takes the boat free of Coastal Capital Corp.’s security interest because it did not have knowledge that the sale of the boat was in violation of the security agreement, only knowledge of the security agreement’s existence.

The question concerns the priority of security interests when a debtor defaults on a loan secured by a motor vehicle that is subsequently repossessed and sold. In New Jersey, as in most states following Article 9 of the Uniform Commercial Code, a perfected security interest generally has priority over unperfected security interests and later-perfected security interests. However, the UCC also addresses the rights of buyers in the ordinary course of business and other transferees. When a secured party repossesses collateral and sells it, the proceeds of that sale are typically applied to the outstanding debt. The critical aspect here is the nature of the interest held by the entity purchasing the vehicle from the secured party after repossession. A buyer of collateral in a disposition authorized by Article 9, such as a foreclosure sale conducted by a secured party, takes the collateral free of the security interest that authorized the disposition and any subordinate security interests and liens, even if the secured party fails to comply with Article 9’s requirements. This is because such a sale is considered a transfer by the debtor, and the buyer’s title is derived from the debtor’s title, subject to the security interest. However, the buyer takes free of the security interest under which the disposition was made. If the secured party fails to comply with the requirements of Article 9 concerning disposition, such as providing proper notice to the debtor or other secured parties, the buyer still takes free of the security interest that authorized the disposition. The buyer’s protection is a key policy to ensure the marketability of repossessed goods. Therefore, any security interest that was perfected prior to the repossession and sale, and that was subordinate to the secured party’s interest, would remain attached to the proceeds if the sale was not conducted in a commercially reasonable manner or if the buyer had notice of the subordinate interest. However, the question asks about the buyer’s interest, and under UCC § 9-617 (which is adopted in New Jersey), a disposition of collateral by a secured party in accordance with Article 9 results in the buyer taking the collateral free of any rights of the debtor and any secured party or lienholder whose rights are subordinate to the disposition. The key here is that the buyer at the foreclosure sale takes free of the security interest that authorized the disposition. If the buyer is a good-faith purchaser at a disposition authorized by Article 9, they take free of the security interest that authorized the disposition. If there were other, prior perfected security interests that were not satisfied by the proceeds of the sale and were not otherwise discharged, they might still have a claim. However, the typical scenario is that the buyer at a foreclosure sale takes free of the foreclosing party’s security interest. The question specifies a buyer from the secured party after repossession, implying a disposition. The buyer in such a disposition takes free of the security interest under which the disposition was made. The protection afforded to a buyer at a disposition authorized by Article 9 is broad, allowing them to take free of the security interest that authorized the disposition. The buyer is not subject to the claims of the foreclosing secured party, nor is the buyer subject to claims of junior secured parties if the disposition is conducted properly and the buyer has no notice of their rights. The buyer takes free of the security interest that authorized the disposition. Therefore, the buyer’s interest is free from the security interest of the foreclosing party.

The core issue here is determining the priority of a security interest in a motor vehicle that has been registered in New Jersey. Article 9 of the Uniform Commercial Code, as adopted in New Jersey, generally governs secured transactions. However, there are specific rules for perfection of security interests in goods covered by a certificate of title. New Jersey’s Certificate of Title Law, N.J.S.A. 39:10-1 et seq., dictates how security interests in motor vehicles must be perfected. Under N.J.S.A. 39:10-12, a security interest in a motor vehicle that is subject to a certificate of title is perfected when the secured party has delivered the certificate of title, an application for notation of the security interest, and the required fee to the Division of Motor Vehicles. Filing a UCC-1 financing statement is generally not sufficient for perfection of a security interest in a motor vehicle covered by a certificate of title. Therefore, even though Liberty Bank filed a UCC-1 financing statement, their security interest in the truck is not perfected against a buyer in the ordinary course of business unless the security interest is noted on the certificate of title. Since the truck was titled in New Jersey, the perfection rules of New Jersey apply. 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, unless the buyer knows of the security interest. Here, the buyer purchased the truck without knowledge of Liberty Bank’s unperfected security interest. Liberty Bank’s failure to have its security interest noted on the New Jersey certificate of title means its security interest is unperfected. Consequently, the buyer takes the truck free of Liberty Bank’s security interest. Liberty Bank’s recourse would be against the seller, not the buyer.

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 New Jersey. Under Article 9 of the Uniform Commercial Code, as adopted in New Jersey, a security interest in accounts is generally perfected by filing a financing statement in the appropriate jurisdiction. For accounts, the location of the debtor is determinative of the proper filing office. In this case, the debtor, “Artisan Furnishings LLC,” is located in New Jersey. Therefore, a financing statement must be filed with the New Jersey Secretary of State to perfect the security interest in Artisan Furnishings LLC’s accounts. While the goods themselves might be located in Pennsylvania, the collateral at issue is the accounts receivable generated from the sale of those goods. Article 9 specifies that for accounts, the law of the jurisdiction where the debtor is located governs perfection. Since Artisan Furnishings LLC is a New Jersey limited liability company, its location for Article 9 purposes is New Jersey. Consequently, filing the financing statement in Pennsylvania would be ineffective to perfect the security interest against third parties in New Jersey. The security interest in the accounts is created by the security agreement, but perfection is required to establish priority against other creditors. Filing in the correct jurisdiction is paramount for perfection.

The scenario involves a purchase money security interest (PMSI) in inventory. Under New Jersey’s UCC Article 9, a secured party claiming a PMSI in inventory must satisfy specific notification requirements to maintain priority over other secured parties. Specifically, the secured party must have perfected its security interest and, within a specified timeframe before the debtor receives possession of the inventory, sent an authenticated notification to any secured party who has filed a financing statement covering the same type of goods. This notification must state that the sender expects to acquire a purchase money security interest in inventory of the debtor, including after-acquired inventory. This is crucial because inventory is constantly changing, and notification ensures that other creditors are aware of the PMSI holder’s claim on the incoming goods. In this case, Amalgamated Bank’s security interest in all of the debtor’s inventory, including after-acquired inventory, was perfected by filing. Capital Finance Corporation’s PMSI in the new manufacturing equipment is also perfected by filing. However, Capital Finance Corporation’s failure to send the required authenticated notification to Amalgamated Bank, which had a prior filed security interest in the debtor’s inventory, means that Capital Finance Corporation’s PMSI in the inventory will not have priority over Amalgamated Bank’s prior filed security interest in that same inventory. The perfection of Capital Finance Corporation’s PMSI in the manufacturing equipment itself is not affected by this failure regarding inventory. Therefore, Amalgamated Bank retains its priority in the inventory.

In New Jersey, the perfection of a security interest in a motor vehicle typically requires notation on the certificate of title, as governed by both Article 9 of the Uniform Commercial Code and New Jersey’s specific motor vehicle titling statutes. While Article 9 generally permits perfection by filing a financing statement, UCC § 9-311(a)(2) provides an exception for goods covered by a certificate of title. New Jersey’s motor vehicle laws, specifically N.J.S.A. 39:10-1 et seq., mandate that a security interest in a motor vehicle be noted on the certificate of title to be effective against purchasers and lienholders. Therefore, a secured party who has filed a financing statement for a motor vehicle collateral but has not obtained notation on the certificate of title has generally failed to perfect its security interest against third parties who acquire rights in the vehicle. This is because the certificate of title system is designed to provide notice of encumbrances on motor vehicles, and reliance on a UCC filing alone for such collateral is insufficient in New Jersey. The priority of liens is determined by the order of perfection, and in the case of titled vehicles, perfection occurs upon compliance with the titling statute.

The core issue in this scenario revolves around the priority of security interests when a debtor defaults on multiple secured loans. Under New Jersey’s Article 9 of the UCC, the general rule for determining priority among competing secured parties is “first in time, first in right,” meaning the secured party who files a financing statement or perfects its security interest first generally has priority. However, there are exceptions and nuances. In this case, both security interests are in inventory. For inventory, attachment alone does not grant priority over a buyer in the ordinary course of business. Perfection is key. First, consider the security interest granted to Capital Bank. Capital Bank properly filed a financing statement on January 15, 2023, covering all of the debtor’s inventory. This establishes Capital Bank’s claim as of that date. Next, consider the security interest granted to Sterling Corp. Sterling Corp. also filed a financing statement on February 10, 2023, covering the same inventory. Since Sterling Corp. filed after Capital Bank, its interest would generally be subordinate to Capital Bank’s interest. The crucial point is the notification provided by Sterling Corp. to Capital Bank regarding its subsequent filing on March 1, 2023. While Article 9 generally prioritizes based on filing or perfection dates, a secured party with an earlier perfected security interest can be subordinated to a later secured party if the later secured party gives new value and the debtor receives delivery of the collateral without knowledge of the earlier security interest, or if the later secured party obtains a new security interest in the collateral. However, this scenario does not involve a purchase money security interest or a situation where the later secured party is unaware of the prior interest. The notification of the subsequent filing does not automatically alter the priority established by the initial filing date. In New Jersey, as in most jurisdictions under Article 9, the priority of security interests in the same collateral is determined by the first to file or first to perfect rule. Since Capital Bank filed its financing statement on January 15, 2023, and Sterling Corp. filed on February 10, 2023, Capital Bank has priority. The notification from Sterling Corp. to Capital Bank about its filing does not retroactively change the priority established by the filing dates. Therefore, Capital Bank’s security interest has priority over Sterling Corp.’s security interest.

Under New Jersey’s Uniform Commercial Code Article 9, when a secured party has a security interest in collateral and the debtor defaults, the secured party has certain rights regarding disposition of that collateral. Specifically, after default, the secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following commercially reasonable preparation or processing. The disposition must be a “commercially reasonable” sale, lease, license, or other disposition. This means the secured party must act in good faith and in a manner that is generally accepted in the trade or business in which the collateral is concerned. New Jersey law, consistent with the UCC, emphasizes that every aspect of the disposition, including the method, manner, time, place, and other terms, must be commercially reasonable. A secured party may also choose to retain the collateral in satisfaction of the obligation, but this process has specific notice requirements and opportunities for objection by the debtor or other interested parties. The question focuses on the secured party’s ability to dispose of collateral after default, highlighting the requirement of commercial reasonableness as the overarching principle governing such actions.

In New Jersey, the perfection of a security interest in a vehicle that is subject to a certificate of title statute is governed by New Jersey’s specific certificate of title law, not solely by the filing provisions of UCC Article 9. UCC § 9-311(a) states that a security interest in goods that are subject to a certificate of title statute may be perfected only by compliance with the certificate of title statute. New Jersey’s Certificate of Motor Vehicle Ownership Law, N.J.S.A. 39:10-1 et seq., requires that a security interest in a motor vehicle be noted on the certificate of title to be perfected. Filing a financing statement with the Secretary of State under UCC Article 9 is generally insufficient for perfection when a certificate of title is required. Therefore, if a lender fails to have the security interest noted on the certificate of title, the security interest remains unperfected against a buyer of the vehicle who takes possession and receives delivery of the vehicle without knowledge of the security interest. Such a buyer would take free of the unperfected security interest. The explanation of the correct answer lies in the priority rules established by the UCC and New Jersey’s specific titling laws, which supersede the general filing rules for perfection in this context.

The scenario involves a purchase money security interest (PMSI) in inventory. Under New Jersey’s Uniform Commercial Code Article 9, a PMSI creditor must satisfy specific requirements to maintain priority over other secured parties. For inventory, this includes both filing a financing statement and providing notification to any existing secured parties with a security interest in the same collateral before the debtor receives possession of the inventory. The filing must occur within a specific timeframe, and the notification must be sent in a timely manner to be effective. In this case, Aurora Corp. filed its financing statement on January 15th and provided notification to Zenith Bank on January 10th. Zenith Bank’s financing statement was filed on January 1st. For Aurora Corp.’s PMSI in inventory to have priority over Zenith Bank’s earlier, non-PMSI security interest, Aurora Corp. must have perfected its security interest before Zenith Bank received possession of the collateral, which it did by filing on January 15th. Crucially, for inventory PMSIs, the notification to prior secured parties must be sent *before* the debtor receives possession of the inventory. Since Aurora Corp. sent notification to Zenith Bank on January 10th, which was before the debtor received possession of the inventory on January 20th, Aurora Corp. has met the notification requirement. Therefore, Aurora Corp.’s PMSI in the inventory has priority over Zenith Bank’s earlier security interest. The date of filing for the PMSI creditor is important for perfection, but the notification timing relative to possession is key for priority against a prior perfected security interest in the same collateral.

The core issue revolves around the priority of security interests when a debtor defaults and a creditor seeks to repossess collateral. In New Jersey, as governed by UCC Article 9, the perfection of a security interest is crucial for establishing priority. A purchase money security interest (PMSI) in consumer goods generally becomes automatically perfected upon attachment. However, for inventory, perfection requires filing a financing statement. If a creditor fails to perfect their security interest, they risk losing priority to other creditors who have perfected or to a buyer in the ordinary course of business. In this scenario, Sterling Bank perfected its security interest in the restaurant equipment by filing a financing statement on March 1st. This filing establishes Sterling Bank’s priority over any unperfected security interests or subsequent lien creditors. The agreement between Prime Restaurant Holdings and Capital Leasing Corp. created a security interest for Capital Leasing Corp. in the same equipment. However, Capital Leasing Corp. failed to file a financing statement. Under New Jersey’s UCC Article 9, specifically concerning priority, a perfected security interest generally has priority over an unperfected security interest. Therefore, Sterling Bank’s perfected security interest takes precedence over Capital Leasing Corp.’s unperfected security interest. The fact that Capital Leasing Corp.’s interest was a PMSI does not alter this priority rule when it comes to inventory, as perfection by filing is required for PMSI priority in inventory. The default by Prime Restaurant Holdings triggers the rights of the secured parties. Sterling Bank, having perfected its security interest through filing, can enforce its rights against the collateral, and its claim will be satisfied before Capital Leasing Corp.’s claim, as Capital Leasing Corp.’s security interest remains unperfected.

The scenario involves a purchase money security interest (PMSI) in inventory. Under New Jersey law, specifically UCC § 9-324, a secured party with a PMSI in inventory has priority over other secured parties if certain conditions are met. For inventory, the secured party must perfect its security interest by filing a financing statement before the debtor receives possession of the inventory. Additionally, the secured party must send an authenticated notification to any secured party or other person who has filed a financing statement covering the goods or who has a perfected security interest in the collateral, and that notification must be received within five years before the debtor receives possession of the inventory. In this case, Sterling Bank filed its financing statement on January 15th, and their notification to Capital Finance was received on January 10th, both before the debtor, “Artisan Goods,” received possession of the inventory on January 20th. Artisan Goods’ receipt of the inventory is the trigger for the perfection requirements for PMSI in inventory. Sterling Bank’s actions meet the statutory requirements for establishing priority for its PMSI in the inventory. Capital Finance’s earlier filing for general intangibles does not grant them priority over Sterling Bank’s PMSI in inventory because the collateral is distinct, and Sterling Bank properly perfected its PMSI in inventory according to the specific rules for inventory PMSI. Therefore, Sterling Bank has priority over Capital Finance with respect to the inventory.