Shippers Dispatch Company Orders Office Equipment from Office Outfitters, Inc

question 35

Essay

Shippers Dispatch Company orders office equipment from Office Outfitters, Inc., which has an unperfected security interest in the equipment until it is paid for. Meanwhile, Shippers Dispatch takes out a loan from Capital Credit, Inc., subject to a security interest in Shippers Dispatch's building and equipment, which Capital perfects. Shippers Dispatch files a bankruptcy petition under Chapter 7. If the petition is granted, in what order will Shippers Dispatch's creditors be paid?

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Definitions:

Directly

In a straightforward or unmediated way, often referring to a direct cause and effect relationship or manner of communication.

Indirectly

In a way that is not directly evident or straightforward; involving an intermediary step or process.

Capital Stock

The total amount of physical goods or capital assets that are available for use in the production of goods and services.

Market Value

The present cost for purchasing or selling an asset or service in the market.