Priority of Security Interests in Transferred Collateral.

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Section 7-9A-325

Priority of security interests in transferred collateral.

(a) Subordination of security interest in transferred collateral. Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:

(1) the debtor acquired the collateral subject to the security interest created by the other person;

(2) the security interest created by the other person was perfected when the debtor acquired the collateral; and

(3) there is no period thereafter when the security interest is unperfected.

(b) Limitation of subsection (a) subordination. Subsection (a) subordinates a security interest only if the security interest:

(1) otherwise would have priority solely under Section 7-9A-322(a) or 7-9A-324; or

(2) arose solely under Section 7-2-711(3) or 7-2A-508(5).

(Act 2001-481, p. 647, §1.)


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