Debtor is seeking a $400,000 loan from Creditor 1. In the course of the negotiations, with Debtor's consent, Creditor 1 files a UCC-1 Financing Statement on Jan 4, indicating Debtor's account receivables as collateral. Creditor 1 and Debtor are unable to agree on terms, and no loan is made. On Feb of the next year, Creditor 2 lends Debtor $500,000 and obtains and perfects a security interest in Debtor's account receivables by filing a UCC-1 Financing Statement. On March 1 of that year, Creditor 1 lends Debtor the $400,000 and obtains a security interest in the account receivables. 11. 

If Debtor defaults on both loans, which claim has priority in the account receivables? 

Answer rating: 100% (QA)

In this scenario Creditor 1 has the priority claim in the account receivables despite Creditor 2 fil... View the full answer