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355.9-324 Priority of purchase-money security interests.
(1)
(2)
(3)
(4)
Except as otherwise provided in subsection (7) of this section, a perfected purchasemoney 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
KRS 355.9-327, 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 twenty (20) days thereafter.
Subject to subsection (3) of this section and except as otherwise provided in
subsection (7) of this section, 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 KRS 355.9-330, and, except as otherwise provided in KRS 355.9-327,
also has priority in identifiable cash proceeds of the inventory to the extent 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
five (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.
Subsection (2)(b) to (d) of this section apply 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
(b) If the purchase-money security interest is temporarily perfected without filing
or possession under KRS 355.9-312(6), before the beginning of the twenty
(20) day period thereunder.
Subject to subsection (5) of this section and except as otherwise provided in
subsection (7) of this section, a perfected purchase-money security interest in
livestock that are farm products has priority over a conflicting security interest in
the same livestock, and, except as otherwise provided in KRS 355.9-327, a
perfected security interest in their identifiable proceeds and identifiable products in
their unmanufactured states also has priority, if:
(a) The purchase-money security interest is perfected when the debtor receives
possession of the livestock;
(b) The purchase-money secured party sends an authenticated notification to the
holder of the conflicting security interest;
(c)
(5)
(6)
(7)
The holder of the conflicting security interest receives the notification within
six (6) months before the debtor receives possession of the livestock; and
(d) The notification states that the person sending the notification has or expects
to acquire a purchase-money security interest in livestock of the debtor and
describes the livestock.
Subsection (4)(b) to (d) of this section apply only if the holder of the conflicting
security interest had filed a financing statement covering the same types of
livestock:
(a) If the purchase-money security interest is perfected by filing, before the date
of the filing; or
(b) If the purchase-money security interest is temporarily perfected without filing
or possession under KRS 355.9-312(6), before the beginning of the twenty
(20) day period thereunder.
Except as otherwise provided in subsection (7) of this section, a perfected purchasemoney security interest in software has priority over a conflicting security interest in
the same collateral, and, except as otherwise provided in KRS 355.9-327, a
perfected security interest in its identifiable proceeds also has priority, to the extent
that the purchase-money security interest in the goods in which the software was
acquired for use has priority in the goods and proceeds of the goods under this
section.
If more than one security interest qualifies for priority in the same collateral under
subsection (1), (2), (4), or (6) of this section:
(a) A security interest securing an obligation incurred as all or part of the price of
the collateral has priority over a security interest securing an obligation
incurred for value given to enable the debtor to acquire rights in or the use of
collateral; and
(b) In all other cases, KRS 355.9-322(1) applies to the qualifying security
interests.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 64, effective July 1, 2001.
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