3|ink wrote:What is the point of the super priority for purchase-money creditors? I get that they get first priority, but it is my understanding that they also have to comply with the recording statutes. Does that just mean that they have to record eventually, but the sequence of recording will not affect their priority?
I just looked this over in Franzese's lecture handout. First of all, a priority conflict between a PMSI-holder and an earlier-in-time creditor really can only happen when a prior creditor has perfected rights in the debtors' after-acquired collateral, right? Otherwise, as a logical matter, there can't be any prior security interests in the collateral because debtor didn't have the collateral until he got it pursuant to the PMSI.
PMSIs in non-consumer goods will get super priority over AACFs if they follow the right rules. If the PMSI is in equipment, the SP just has to file within 20 days of the debtor taking possession of the equipment, and then he gets super priority. If the PMSI is in inventory, then they have to file and notify the prior AACF before the debtor takes the possession of the inventory. As long as they do this, they get superpriority.
And I guess, because PMSIs in consumer goods perfect automatically upon attachment, a holder of a PMSI in consumer goods never has to file anything in order to get super priority? I guess that's the whole point of giving that special status to the consumer goods PMSI-holder.