What are the two requirements for a PMSI creditor to obtain super-priority in inventory?

To secure super-priority for a Purchase Money Security Interest (PMSI) in inventory, a creditor must meet two specific criteria: perfection of the PMSI and notification to competing secured creditors.

Perfection occurs when the PMSI creditor properly files a financing statement, thereby establishing their security interest legally. For a PMSI in inventory, this perfection helps distinguish their claim in a competitive situation where multiple creditors may have interests in the same collateral.

Additionally, notifying competing secured creditors is crucial because it informs them of the PMSI and its priority status. This notification allows those creditors to understand their standing relative to the PMSI creditor, ensuring transparency in the secured financing landscape.

Together, these steps give the PMSI creditor a distinct advantage over other creditors with interests in the same inventory, allowing them to claim super-priority under Article 9 of the Uniform Commercial Code. This super-priority means that in the event of debtor default, the PMSI creditor can have priority claims against the inventory regardless of when other creditors may have perfected their interests, provided the notification is done correctly within the designated timeframe.

The other alternatives do not align with the requirements outlined in UCC Article 9 for achieving super-priority status in inventory, which clarifies why those