Rich Electronics sells various brand name televisions and stereos at discount prices. Rich maintains a large inventory which it obtains from various manufacturers on credit. These manufacturer-creditors have all filed and taken security interests in the goods and proceeds therefrom which they have sold to Rich on credit. Rich in turn sells to hundreds of ultimate consumers; some pay cash but most buy on credit. Rich takes a security interest but does not file a financing statement for credit sales. Which of the following is correct?
1)Since Rich takes a purchase money security interest in the consumer goods sold, its security interest is perfected upon attachment.
2)The appliance manufacturers can enforce their security interests against the goods in the hands of the purchasers who paid cash for them.
3) A subsequent sale by one of Richβs customers to a bona fide purchaser will be subject to Richβs security interest.
4) The goods in Richβs hands are consumer goods.
Can someone explain to me why choice 2 is wrong? The manufacturer's have filed their security interests so should it not hold good against future buyer in the ordinary course of business?
Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.
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