[Favi's Furniture] Favi Took Out a Loan from First Bank

question 41

Multiple Choice

[Favi's Furniture] Favi took out a loan from First Bank and executed a security agreement which gave First Bank rights to any after-acquired property as collateral. A year later, Favi took out a loan with Second Bank and executed a security agreement with Second Bank using his new delivery truck as collateral. Favi eventually defaulted on both loans.
-Which creditor has rights to Favi's delivery truck as collateral?

• A) First Bank, because in a dispute between two secured but unperfected creditors, the party who attached first takes priority.
• B) First Bank, because in a dispute between two secured and perfected creditors, the party who perfected first takes priority.
• C) First Bank, because in a dispute between a secured perfected creditor and a secured unperfected creditor, the secured perfected creditor takes priority.
• D) The two banks will have equal rights to the property.
• E) Second Bank, because "after-acquired property" is not specific enough to grant attachment right to First Bank, and, thus, the secured agreement of Second Bank takes priority.

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Definitions:

Stay-back Team

A group within an organization designated to continue critical operations during emergencies or major events, ensuring business continuity.

Outsourcing Contract

A formal agreement where a company hires an external party to perform services or create goods that were traditionally performed in-house.

Evaluation Team

A group of individuals tasked with assessing a particular project, program, or employee performance, often to inform decision-making processes.

Analyzing Bids

The process of reviewing and comparing proposals from vendors or contractors to select the best option.