Priority of security interests in transferred collateral

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  • (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 § 9–322(a) or 9–324; or

    • (2) arose solely under § 2–711(3) or 2A-508(5).


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