Flashcards Studio

Under Secs. 3 and 4 of the Personal Property Security Act (R.A. 11057): (a) identify the definitional terms in Sec. 3 that govern what constitutes collateral and who are the debtor and secured party, and briefly describe their meanings as used in the statute; (b) describe the scope of the Act as set forth in Sec. 4, including which kinds of personal property and transactions are covered and whether proceeds are included; (c) apply to the following facts: GreenBridge Farms, Inc. (debtor) obtains a secured loan from NorthBridge Credit Union. The Security Agreement covers “all present and future personal property” of GreenBridge Farms, expressly listing crop inventory, accounts receivable, and on-farm processing equipment as collateral. NorthBridge files a financing statement. GreenBridge later sells harvested apples to Crestline Grocers, a buyer who has no knowledge of the security interest. GreenBridge also enters into a factoring arrangement with FastReceivables, Inc. to sell post-sale receivables arising from the Crestline sale. Discuss (i) which asset categories fall within the Act’s definitional and scope; (ii) whether the security interest extends to (A) the sold apples, (B) the cash proceeds from the sale, and (C) the post-sale receivables arising from the factoring arrangement.