On July 1, Mega Bank attaches and perfects a security interest in all of the Imagine, Inc.’s present and after-acquired equipment. On July 15, Fun Co. sells and delivers a new toy manufacturing machine to Imagine, Inc. Fun Co. attaches a security interest in the machine on July 16 and perfects it by filing on July 17. What is the general priority rule established by the Uniform Commercial Code? Which security interest has priority and why? How does the Uniform Commercial Code help or hurt business transactions such as the one presented here? What if Imagine, Inc. has not paid for the toy manufacturing machine and files for bankruptcy on August 15th? Who will be deemed the secured creditor, Mega Bank or Fun Co.? Support your positions and provide citations for all outside sources used to develop and defend your position To participate in follow-up discussion, choose a topic from the Uniform Commercial Code – Article 2 – Sales and summarize how that Part of Article 2 helps or hurts business transactions such as the one presented here and compare your response to that of a classmate.
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