Smith Auto Sales Has a Secured Loan on Its Inventory

question 69

Multiple Choice

Smith Auto Sales has a secured loan on its inventory through Northshore Credit Union,which Northshore filed in February.In March,Smith Auto Sales has another secured loan on its inventory from GMAC credit.GMAC files its security interest in May.Which creditor will have priority in the event of a default by Smith Auto Sales?

• A)Neither will have priority and both will share equal revenue from the sale of inventory.
• B)Northshore will have priority and it will have its debt satisfied prior to GMAC receiving funds.
• C)Since GMAC came last,it will have priority and will have its debt satisfied before Northshore.
• D)Since there is a conflict with the security with the inventory,neither security interest will be recognized and both creditors will get nothing.

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Definitions:

Euthanizing

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Prognosis

A medical term referring to the predicted course and outcome of a disease.

Prima Facie Duty

An obligation that appears to be binding at first glance unless it is overridden by a more compelling moral duty in a particular context.

Impaired Infant

A newborn with a significant genetic, physical, or functional limitation that may affect their health or development.