Secured Transactions: Priority: Purchase Money Security Interests (PMSI) Podcast
The topic of this podcast is which party will prevail in a competition for collateral as between sellers or lenders having a purchase money security interest (“PMSI”) and other creditors with a security interest in the debtor’s assets. While secured parties might expect to prevail with respect to their collateral most of the time, those sellers and lenders that have a purchase money security interest also have expectations. This podcast will examine the nature of a PMSI and the rules that come into play to determine which creditor has priority under § 9-324. These rules are commonly tested on law school and bar examinations. A PMSI is simply a specific type of security interest. In order to attach the interest, the attachment rules of § 9-203 still apply, At the conclusion of this podcast, you should be able to (1) identify and describe what a PMSI is; (2) describe how a secured party can create and perfect a security interest in purchase money collateral; (3) explain the rules governing priority of PMSIs; and (4) apply the rules related to purchase money security interests, including those related to proceeds.