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Section 12A:9-325 - Priority of security interests in transferred collateral.

NJ Rev Stat § 12A:9-325 (2019) (N/A)
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12A:9-325 Priority of security interests in transferred collateral.

12A:9-325. Priority of Security Interests in Transferred Collateral.

(a) Subordination of security interest in transferred collateral. Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:

(1) the debtor acquired the collateral subject to the security interest created by the other person;

(2) the security interest created by the other person was perfected when the debtor acquired the collateral; and

(3) there is no period thereafter when the security interest is unperfected.

(b) Limitation of subsection (a) subordination. Subsection (a) subordinates a security interest only if the security interest:

(1) otherwise would have priority solely under 12A:9-322 (a) or 12A:9-324; or

(2) arose solely under 12A:2-711(3) or 12A:2A-508(5).

L.2001, c.117, s.1; amended 2001, c.386, s.41.

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