Also known as: perfected security interests · perfected SI
Written by attorneys · grounded in primary & secondary sources — see below
A security interest that complies with the statutory requirements for achieving priority over a trustee in bankruptcy and unperfected interests. A perfected interest may also have priority over another interest that was perfected later in time.
Precision Tools extends credit to Pioneer Energy and files a financing statement covering equipment on March 1. Progressive Healthcare later extends credit to the same debtor and files a financing statement on the same equipment on April 15. When Pioneer defaults, Precision Tools holds the senior claim because its filing occurred first.
Precision Tools obtains a security interest in inventory from Pioneer Energy and files a financing statement to perfect it. Progressive Healthcare later obtains a security interest in the same inventory but never files a financing statement. When Pioneer defaults, Precision Tools holds the senior claim over Progressive Healthcare.
Select any source to read its text and confirm it supports the definition.
A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien under the UCC priority rules.
Conflicting perfected security interests rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest is first perfected.
If a secured party assigns a perfected security interest, a filing under Article 9 is not required to continue the perfected status against creditors of and transferees from the original debtor.
A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected, subject to time limits that may cause it to become unperfected after twenty-one days unless additional steps are taken.