Article 9 gives consignors an automatic purchase-money security interest in inventory, (18) and courts would likely consider paintings to be inventory.
82) UCC section 9-103(d) states that "the security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory.
87) Purchase-money security holders must perfect their purchase-money security interest when the debtor gains possession of the inventory.
If the consignment of the Picasso survived these definitional challenges and the court deemed the consignment transaction to meet section 9-102(a)(20)'s definition of consignment, Susan would have a purchase-money security interest in the Picasso painting pursuant to UCC section 9-103(d).
Under UCC section 9-324, if the "holder of a conflicting security interest" had filed a financing statement that encompasses the "same types of inventory" as the purchase-money security interest, the purchase-money security interest holder must comply with measures to notify the conflicting security interest holder of her interests in the debtor's property.
167) Even following the 2001 UCC revision, collectors may be confused about what they must do to perfect a purchase-money security interest in their consigned artwork.
section] 9-324(a) ("[A] perfected purchase-money security interest in goods.
It is not clear under current [ss] 9-312(4) whether a secured party can obtain a purchase-money security interest in intangible collateral.
for the principal purpose of running the software on hardware in which the secured party also has a purchase-money security interest, and
Except for consumer-goods transactions, Article 9 rejects the "transformation rule" that some courts applied under the old Article 9 that provided that purchase-money security interest could lose its "purchase-money" character in certain circumstances, such as a refinancing of the purchase-money debt or having other collateral secure the purchase-money debt.