NH Bar Practice Questions - New Hampshire Bar Examination (UBE) Exam

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A bank holds a purchase-money security interest (PMSI) in inventory and properly perfects it and gives the required notice before the debtor receives the inventory. As against an earlier-perfected general security interest in the same inventory, the PMSI:

Always loses to the earlier-filed interest Has priority only after the debtor defaults Is unenforceable because two interests cannot exist in inventory Takes priority in the inventory if the PMSI is perfected and the notice requirements are satisfied

Correct Answer:

Takes priority in the inventory if the PMSI is perfected and the notice requirements are satisfied

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