409.324 Priority of purchase-money security interests.

326 words·~1 min read·/wi/chapter-409/409-324

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)General rule: purchase-money priority. Except as otherwise provided in sub.

(7), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in s. 409.327 , a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter.

(2)Inventory purchase-money priority. Subject to sub.

(3)and except as otherwise provided in sub.

(7), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in s. 409.330 , and, except as otherwise provided in s. 409.327 , also has priority in identifiable cash proceeds of the inventory to the extent that the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:

(a)The purchase-money security interest is perfected when the debtor receives possession of the inventory;

(b)The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;

(c)The holder of the conflicting security interest receives the notification within 5 years before the debtor receives possession of the inventory; and

(d)The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.

(3)Holders of conflicting inventory security interests to be notified. Subsection

(b)to

(d)applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory:

(a)If the purchase-money security interest is perfected by filing, before the date of the filing; or