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OmegaTech Manufacturing, Inc. (Debtor), a Philippine corporation, borrows PHP 5,800,000 from GlobeBank (Creditor). To secure the loan, Debtor executes a Security Agreement describing collateral as: “All present and after-acquired CNC machines, robotic arms, automation systems, and related assets used in Debtor’s manufacturing operations, together with all accessions and proceeds.” The instrument is delivered to Creditor and purportedly authenticated by Debtor’s Senior Vice President for Operations. Debtor’s by-laws require that any security interest in assets exceeding PHP 5,000,000 must be authorized by the Board of Directors and signed by the President or an approved signatory; there is no Board resolution authorizing SVP to sign for loans of this size. Debtor continues to operate; Creditor disburses the funds; there are no other security interests. (a) Identify the essential elements for creation/attachment of a security interest under RA 11057. (b) Based on the facts, did attachment occur? Explain with reasons. (c) If attachment did not occur, what steps could Creditor take to create a valid security interest in the collateral?

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Attachment could occur only if the Board ratifies the SVP’s authority; upon ratification, the security agreement would attach from the date of the ratification. Attachment occurred; the collateral description is sufficiently definite and the ‘present and after-acquired’ language is permitted under RA 11057, so attachment exists despite the lack of board authorization. Attachment occurred; the bank’s disbursement of funds and receipt of collateral makes attachment inevitable once any signed security interest exists, and board authorization is a separate governance matter. Attachment did not occur; the Debtor’s SVP was not authorized by the by-laws to sign for loans of PHP 5,800,000, so authentication is invalid and no attachment takes place.

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